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L.L. Bean continues to trim its workforce in an effort to contain costs and remain competitive, it was announced on Feb. 4. The company plans to eliminate 300 jobs over the next two months, cutting its workforce by nearly 7 percent. This news comes almost one year to the day that Bean announced a 4 percent reduction in 2002.
This latest announcement comes on the heels of Bean offering early retirement packages to 500 of the company’s employees in November, less than a month after laying off an additional 13 employees in both the marketing and merchandising departments. Only 200 staff took Bean’s initial offer, leaving the company the task of trimming 300 more through involuntary means. Once the layoffs are completed, Bean will have reduced its staff numbers by nearly 11 percent since October.
Insiders have told SNEWS that the company sales have only managed to inch up incrementally from the 1995 boom years, residing now around $1.1 billion. Overall growth for 2003 is not expected to be more than 6 percent to 7 percent, resulting in only a 1 percent blip upward of revenue numbers. That said, the company remains profitable, despite flat revenues, largely because of streamlining operations which have resulted in the staffing reductions. More reductions are necessary, according to the company, to maintain a competitive position in the face of increasing competition and rising costs, including health care increases and payroll raises.
SNEWS View: Competition is coming from a number of fronts and shows no signs of lessening. Little doubt REI is taking its toll on Bean numbers as REI continues its climb toward $1 billion in sales, a goal SNEWS believes is likely sooner than later. Lands’ End, which competes with Bean on the apparel side, has far outstripped Bean in sales, grossing $1.6 billion last year. Bean tried to compete for the women’s clothing dollar with Freeport Studio, launched in 1998 — a fashion failure the company has since shut down. Store openings in Virginia, Maryland and New Jersey have not gone as swimmingly as planned, causing the company to step back and rethink its retail expansion strategy. Bean’s been stuck at the $1.1 billion level since 1995, and will have to rethink more than just the company’s retail expansion strategy and cost reduction focus if it is to jump-start sales in a meaningful manner.