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BEAN HERE, COMING THERE

Catalog Giant L.L. Bean Gets Ready To Roll Out 60 New Stores

By Dees Stribling

Outdoors Gear Specialist L.L. Bean is getting its act together and taking it on the road. Having opened a handful of retail shops along the eastern seaboard a few years ago, the famed outdoors clothier and outfitter has some aggressive rollout plans that could add about 60 new stores by 2015. Historically speaking, these plans are a radical departure for the company, which was founded in 1912 on a brisk trade in hunting shoes and grew through the century as a mail-order business with just one store. That flagship store, in Freeport, Maine, is something of a retailing legend. Beginning in 1951, it became a 24-7 store — it was years ahead of the curve in that regard — closing only twice since then: once for the funeral of President Kennedy in 1963 and again at the death of company founder, Leon Leonwood Bean, in 1967.

Until the late 1990s the company steadfastly remained a mail-order (and then an Internet) retailer with that single store. Then it began testing the waters of chain retailing by opening two more stores in Freeport, plus a scattering of others — one each in Maryland, New Jersey and Virginia. The company also established factory outlets in various places near home. But between 2002 and 2005, the expansion stopped. “After those first stores opened, our CEO [Christopher J. McCormick] said it was time to step back and do a really close examination of what we’d learned from them,” said Ken Kacere, senior vice president and general manager of L.L. Bean Retail. “That information was essential to the formulation of the rollout strategy, put together in 2004 and 2005, that we’re pursuing now.”

According to Kacere, the take-away from the early stores included fundamental lessons about optimal store size and location. The store in Tysons Corner Center, the regional mall in metro Washington, measures 75,000 square feet. “Based on our experience there, we know that’s larger than an L.L. Bean store needs to be,” Kacere said.

The company also discovered that an in-line regional mall location is not ideal either. Selling a line of clothes inside a mall is one thing, but L.L. Bean’s outdoor gear and sports equipment are more problematic. “Being an in-line store isn’t especially conducive to selling items like kayaks or bicycles or fly rods,” said Kacere. “Those are things that people don’t want to haul around a mall.”

So for its next retail locations, L.L. Bean went to an outlot site of the Mall in Columbia (Md.), between Washington and Baltimore, and to the Promenade at Sagemore, a lifestyle center in Marlton, N.J., near Philadelphia. These stores measure about 30,000 square feet, big enough to display a good selection of merchandise but not as expensive to operate as a larger store. “Marlton is our best performer among the early stores,” said Kacere. “It’s an anchor in that location, with parking in front, and a destination within the shopping center. It all makes for a better shopping experience, and shoppers respond to it.”

In 2005 and 2006 L.L. Bean renewed its bid to be a chain retailer. It opened stores in Burlington, Mass. (Wayside Commons); Center Valley, Pa. (the Promenade Shops at Saucon Valley); and West Lebanon, N.H. (Power House Mall), all in lifestyle center locations. Three stores are slated for later this year — in Albany, N.Y., Mansfield, Mass., and South Windsor, Conn. The company plans to open five stores next year and then eight stores per year after that until at least 2015. “We look at locations with a strong presence of L.L. Bean customers and also customers who fit the L.L. Bean profile — higher-income, well-educated, family-oriented, enjoys the outdoors,” said Kacere. As a major mail-order and Internet retailer, L.L. Bean has a leg up in site selection, he says, in that it already knows where a lot of its customers are.

Still, can L.L. Bean, so long a catalog company, pursue retail expansion successfully? Some say yes. “L.L. Bean has a very good chance of making the transition,” said Dan Stanek, an executive vice president at Retail Forward, a Columbus, Ohio-based retail consultant firm. “Many catalogers have been very successful in doing exactly that — Coldwater Creek, Talbots, Brookstone, just to name a few — and in fact find that retail stores become a dominant part of their business. Historically, the main obstacle to a cataloger opening retail stores is if the cataloger has been a little too successful in a niche offering. That niche might not appeal to a breadth of shoppers.” L.L. Bean, with its wide selection, should not have that problem, though, he says.

“Still, there may be some other challenges,” Stanek said. “It’s an entirely different thing, running a chain of stores. A cataloger holds a variety of colors and size in one central location, while a chain has to match merchandise with the demand of each particular locale.”

Walter F. Loeb, president of Loeb Associates, a New York City-based retail consulting firm, says he is largely optimistic about L.L. Bean’s prospects. “Their experience in opening stores so far is pointing them to strong locations in lifestyle centers,” Loeb said. “It’s very likely that will work out for them.” But he also noted the problems that some catalog companies, especially those who sell clothing, have encountered in making the transition to brick and mortar. “The structure of a cataloger is such that they don’t generate the kind of excitement, week after week, that a chain of stores can. Catalogers are more used to a selection of merchandise that changes more slowly.” L.L. Bean’s strategy for generating excitement is to turn its stores into activity-oriented destinations, Kacere says. This is no novel approach, because Bass Pro Shops, Cabela’s and other outdoors specialists do the same thing. They are selling the activity itself as much as the equipment, so it makes sense to incorporate that into the store design as they do. Each L.L. Bean store has an Outdoor Discovery Center, a place where customers can learn new activities or improve their skills through demonstrations and classes. Some stores have extensive infrastructure for testing out equipment. Behind the parking lot at the Center Valley store is a pond for trying out fishing, kayaking and other water sport gear.

The new stores will not replace the company’s mail-order sales, Kacere says. Rather, the idea is for the stores to buttress the catalog and Internet channels, and vice versa, the sort of multichannel strategy that seems to be catching on. “The stores will be an essential leg in our multichannel strategy,” Kacere said. “We have about 30,000 items, and a store will carry about 20 percent of that total. But by simply being there, the stores will help drive orders for the entire selection.”

Geography, too, presents an interesting problem for L.L. Bean. Mainstream clothiers, of course, need to consider geography in their merchandise selection as the seasons go by at different paces in different regions. But L.L. Bean is strongly associated with New England, with its sharply contrasting seasons. “Our brand is more of the Northern product line: outerwear, foul-weather wear, winter sporting equipment, that sort of thing,” Kacere said. “So, naturally, we’re more inclined, at least for a while, to locate in the Northern part of the country.” At the outset the company will be seeking locations in the Northern tier of states, from its current haunts in New England and the mid-Atlantic to perhaps as far west as metro Chicago or Minneapolis. Then the company will focus more heavily on the mountain states.

Not that the Sun Belt is necessarily out of the running. “That won’t be in the early years of the rollout,” said Kacere, “but we expect it to happen in the later years.”

Kacere expects the company will someday set up another flagship in another part of the country, presumably far from Maine. “That’s still very early in the discussion stage,” he said. “But it’s a serious idea. It will happen eventually.”