L.L. Bean sales fall again in 2009, but company beats its projections

L.L. Bean sales fall in 2009

FREEPORT, Maine — Sales dipped for L.L. Bean for the second consecutive year in 2009 but the outdoors clothing retailer managed to beat its own projections, the company said Friday. The company also reported that online sales outpaced catalog orders for the entire year for the first time.

President and CEO Chris McCormick told employees that revenue for the fiscal year that ended last month was about $1.4 billion, down from $1.5 billion the year before. The 6.6 percent drop capped a challenging year for the company, which has seen revenue decline only four times since 1960.

Still, strong sales in January and February helped the company beat its profitability goals, and 5,000 employees are eligible for a 3 percent cash bonus, he said.

“While we face many challenges ahead as the economy continues its slow recovery, we are optimistic about the future,” McCormick told workers in a memo.

L.L. Bean wasn’t alone in struggling in 2009, which saw the biggest yearly decline in overall retail sales on record in the U.S.

But there are signs that things are turning around in the new year. As for L.L. Bean, the company has seen surprisingly strong numbers in the first two months of the year, thanks in part to strong sales of winter clothing after back-to-back snowstorms on the East Coast.

L.L. Bean shopper Susi Homer said people are feeling a bit better about the economy but they’re still being cautious with their spending. In a typical year, the bed and breakfast owner budgets $700 for her business wardrobe, but last year she spent nothing at all. This year, she’s budgeted $300.

“It’s not that we’re not spending. We’re just not spending as much,” Homer, of Southwest Harbor, said Friday as she left L.L. Bean’s store with her purchases.

L.L. Bean saw a 7.8 percent drop in sales in 2008 as the economy stumbled, and it began 2009 by planning conservatively with inventory, cutting expenses and avoiding deep discounts, spokeswoman Carolyn Beem said. The company also reduced its work force by offering early retirement packages and laying off 100 workers.

McCormick said 2010 will be a rebuilding year.

The company will invest in building its online presence, expanding the number of stores in China from 30 to 80 and attracting younger customers through its Signature brand, which launches on Monday, he said.

“The prolonged recession has altered the retail industry and consumer buying habits, most likely for the long term. We need to adapt to strengthen our business model and enhance our ability to gain market share,” he said.

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