L.L.Bean on track for strongest year in company history, CEO says
Courtesy / Husson University
Stephen Smith, L.L.Bean’s president and CEO, said that when the pandemic hit, the company’s previously implemented retail strategies prepared it to weather the worst.
L.L.Bean Inc. had its strongest year in company history in 2020 and is on track to do even better this year.
That’s according to Stephen Smith, the president and CEO of the clothing and outdoor goods retailer, who spoke Thursday during Husson University’s Distinguished Speaker Series.
L.L.Bean, whose headquarters and flagship store are in Freeport, had a solid foundation in e-commerce and had changed its systems, culture and business process well before the pandemic, said Smith.
“When the pandemic hit, we were ready to weather the worst, and ready to capitalize on the opportunities that presented themselves because of the changes we had made prior to that,” he said.
Smith took the reins as the retailer’s president and CEO in 2016.
His previous career as a retail executive spanned the globe, including Belgium, the United Kingdom and China, as an executive with the Delhaize Group, the parent company of Hannaford Brothers Co., and later with Walmart International and Yihaodian, a Walmart division in Shanghai.
In 2015, a recruiter contacted Smith after his predecessor, Chris McCormick, announced he would retire.
“I was really intrigued,” said Smith.
The CEO transition had been well-thought-out by the firm’s owners and board of directors, but "the business knew it needed to change in a lot of ways,” he said. That included changes around the brand, culture and business operations.
“We’ve worked hard to push through an aggressive change agenda,” he said.
The company had “strayed” toward products and marketing such as office clothes and casual wear, he said.
Change included a return to the company’s roots as an outdoor brand, but with a contemporary update. Under Smith’s leadership, the company came up with new branding that focused on the joy of the outdoors and being “an outsider.”
Other adjustments were made, including to the company’s returns and free shipping policies.
More recently, the pandemic spurred additional changes as the company worked to shore up the business for survival.
“As a retail business, it was extraordinarily scary,” he said.
Smith and his team developed a strategy to make many difficult decisions as early as possible. The goal was to avoid being in a place in the future and saying, "I wish we had done this and that," he said.
Those decisions included ones about cash preservation and about safety for employees and customers. “All of that unfolded early on,” Smith said.
The retailer soon found its wares were in demand. Early on, people hunkering down at home began buying cozy clothes such as slippers and flannel.
“Indoor comfort was massive,” he said.
Soon, orders were increasing for indoor furniture, and then outdoor furniture and games. “Then they started to hike and walk their dogs,” he said. “So we shifted and had an outdoor connection going.”
For 2020, the company reported revenue of $1.59 billion, a 5% increase over the previous year, with outdoor furniture sales nearly doubling and sales of outdoor games up 65%.
“The role of L.L.Bean and all outdoor enthusiast companies was to provide mental and physical l health in extraordinary times,” Smith said.
The company’s long-time e-commerce capability helped. The implementation began in 1996.
“We’ve been doing it 25 years,” he said. “So our e-commerce business was mature and robust.”
Smith said he’s encountered numerous challenges in his career, including a government raid and the imprisonment of 36 employees during his time with Walmart in China.
But the pandemic stands out.
Smith said, “Managing the business through 2020 and 2021 will forever be the most interesting leadership challenge."
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