How Maine Bootmaker L.L. Bean Became Fashion's Hottest Company
This story appears in the April 13, 2015 issue of Forbes.
So it must come as a shock to global fashionistas that the most coveted item in recent memory costs a mere $109 and comes from the rugged New England town of Freeport, Maine rather than an atelier in Paris or Milan.In December outdoor outfitters L.L. Bean announced that the wait list for its unglamorous, all-weather Bean Boots had reached an incredible 100,000 customers.
The two-toned brown-and-taupe leather boots have always had a following on East Coast college campuses thanks to their New England cachet, preppy aesthetic–and durability. But no one, including L.L. Bean CEO Chris McCormick, can quite put a finger on what’s driving the current boom, during which boot sales rose 12.5% from 400,000 in 2013 to 450,000 last year.
“We forecasted for a large increase this year, but it came in at twice the forecast,” says the 32-year company veteran and the first person to lead the company who isn’t a descendant of founder Leon Leonwood Bean.
There’s no doubt about one reason behind the craze: quality. Every single pair is handmade, with all its components sourced in the U.S. Each set takes anywhere from 45 minutes to an hour to make, passing through eight pairs of hands. On the factory floor in coastal Brunswick the slightly weary workforce is pulling extra shifts to meet demand, but the process remains the same.
“You mess up, you’re going back to square one,” says Cindy Morse, a 21-year Bean veteran, over the thud of a vamping machine that finishes off each boot with three stitches of heavily waxed thread. There’s urgency but no rush. If you bought a pair in February, you can expect to receive them around June.
That high level of commitment runs deep among Bean workers, and it shows. In FORBES’ first-ever ranking of America’s Best Employers, L.L. Bean–just “Bean” to Freeport locals–finished fifth overall and first among clothing and outdoor-gear makers.
Meanwhile, the company recorded revenues of $1.61 billion in 2014, and it expects another uptick this year, its sixth straight, which will take it past even its 2007 prerecession high. FORBES estimates that the private company’s profit margin hovers around 10% .
This steady growth bucks a downward trend that’s seen others in the midpriced-apparel sector struggle. Last spring troubled retailer Sears spun off L.L. Bean’s closest competitor, Lands’ End, 12 years after buying it for $1.9 billion.
Lands’ End shares tanked in late January when the cold-weather clothier announced lackluster holiday sales, 7% lower than expected. In February Lands’ End made a surprise announcement: It had hired Federica Marchionni, formerly U.S. head of luxury label Dolce & Gabbana, as CEO.
McCormick’s team? It’s decidedly less chic, and he’s just fine with that. “They’re really our secret weapon, our competitive advantage,” he says. “Because they are so good and so dedicated, I think much more so than other retailers.”
L.L. Bean CEO Chris McCormick. Photo: Shawn Henry for Forbes.
BEAN BOOTS WERE ORIGINALLY intended for hunters, not city dwellers aping lumberjacks to be hip or southern college students, both of whom have contributed to the current mania. At the turn of the 20th century Greenwood, Me. native and avid outdoorsman Leon Leonwood Bean had returned home from a hunting trip with soggy feet one too many times.
He hired a local cobbler to develop a pair of waterproof boots. The first L.L. Bean catalog was a three-page flyer he sent to fellow hunters in 1912. Of the initial order of 100 pairs, 92 were returned; Bean’s rubber soles had developed cracks.
L.L. took out a $400 loan, intent on perfecting his boots. By 1917 he’d set up shop in Freeport. Four years later he patented his Maine Hunting Shoe.
The Bean Boot–among some 150,000 products, from flannel shirts to fleece dog beds to lawn furniture, that the company sells–has made L.L.’s descendants very wealthy indeed. The company remains wholly owned by the family. FORBES estimates the Bean clan’s combined net worth at $1.8 billion, earning them a spot on 2014′s inaugural list of America’s Richest Families.
The current chairman, 49-year-old Shawn Gorman, is L.L.’s great-grandson; he succeeded his uncle Leon two years ago. Members of their extended family hold down jobs all across the 5,300-employee company. There’s a fifth-generation Bean in the marketing office. One works in the warehouse and another in a store. There’s a young Gorman in the e-commerce part of the business.
McCormick sees the company’s family ownership as intrinsic to its culture. “We value our employees more, I think, than maybe some other companies,” he says.
While much of L.L. Bean’s manufacturing is now done overseas (some 75%), the company’s signature boots are still made in Maine, largely the way they were in L.L.’s day.
Putting each boot together entails not just time but a certain degree of skill as well, with up to six months of training required for the stitchers. Says L.L. Bean head of public affairs Carolyn Beem, “You can’t just hire somebody off the street and say, ‘Make the boots.’ “
During the second shift on a February afternoon Connie Rose, a factory employee of 19 years, hand-cuts leather shoe forms from a pile of tanned hides recently delivered from a cow farm in the northern part of Maine. Next to that pile is a waist-high stack of fluffy sheepskins waiting to be converted into boot linings.
Rose uses a steel die that looks like a sharp, oversize cookie cutter to turn flat sheets of leather into the sides, backs and tongues of boots. She says she cuts enough leather per shift to make 120 pairs.
Toward the back of the factory are laundry trolleys laden with hundreds of newly completed Boat and Tote bags, Bean’s most-ordered products after the boots, their hardy beige canvas offset by colorful pastel straps and monogrammed initials. For every “Liam” or “Lisa” sewed on to a tote, there’s a Japanese name; the Boat and Totes are hugely popular in Japan, where L.L. Bean operates 20 stores and is growing.
The workforce is a diverse one, particularly for Maine, where the population is 95% white. More than 40 languages are spoken in manufacturing, according to McCormick. There are workers with origins in the Philippines, the Dominican Republic and Somalia, among others, cutting and sewing alongside born-and-raised Mainers, who make up the bulk of the company’s employees.
It’s also a relatively old group, with a median age of 48. Royce Haines, L.L. Bean’s senior manufacturing manager, works alongside his wife at the company. “Between us we have 60 years,” he says, surveying the noisy factory floor and pointing out other sets of couples and longtime employees.
The company goes out of its way to recruit older workers, particularly for its seasonal factory and warehouse positions, when it relies on retirees seeking some extra cash. About 60% of the 5,000 extra shift workers who come on board each August for the crucial holiday season return every year. Bean has advertised for these temporary gigs by pointing out that the 25% to 40% employee discount can be used toward gifts for the grandkids.
The pay isn’t bad, either. The average hourly worker earns between $32,000 and $35,000 annually. This year all 5,300 of Bean’s full-timers will get a 5% boost in their pay from company profits, amounting to between $1,500 and $2,000 apiece.
A staggering 21% of L.L. Bean’s employees have been with the company for more than 20 years. “If you’re fortunate enough to get a job at Bean, you stay there,” says Dana Connors, president of Maine’s Chamber of Commerce. L.L. Bean is among the top five private employers in the state by size, although there isn’t a whole lot of competition. (Maine placed 49th on FORBES’ 2014 list of Best States for Business, due in part to its high corporate tax burden and lousy job-growth forecast.)
Connors credits Bean for weathering a particularly tough retail environment in recent years. “They were opening up stores when everyone else was migrating onto the Internet,” he says.
WHILE ONLINE ORDERS officially surpassed phone and mail orders in 2009, L.L. Bean remains a catalog company at heart. Many of its regular customers predate the e-commerce boom and still prefer a voice at the end of a phone.
On an afternoon shift at Bean’s Northport customer service center, Rae Cousins, who’s worked there 28 years, comforts a caller who can’t seem to pry open the battery door on the LED headlamp he ordered and doesn’t want to venture out into the Minnesota winter without it because of his age and frailty. “I understand,” says Cousins. “I’m elderly, too.”
Before Cousins is finished with his call, an alarm sounds above the rows of gray cubicles reminding workers to get up and stretch during their shift. Perhaps fittingly for an outdoor-gear manufacturer, Bean is obsessive about its employees’ health. There are gyms in every office, call center and factory.
For what the company deems “at risk” workers–diabetics or the obese, for example–there’s a competitive, application-only health and fitness program called BeanStrong. Employees who win a slot attend classes during work hours, overseen by trainers and nutritionists. The company pays for 75% of its workers’ health care costs as part of its benefits package.
In recent years L.L. Bean has had to train its call center workers to channel their considerable telephone charm toward answering e-mails and social media queries and conducting live chats.
The company consistently ranks at the top of monthly benchmark reports by StellaService, a Nielsen-like ratings agency for online customer service, beating out competitors such as Lands’ End, REI and Patagonia. Metrics include shipping speed, ease of returns and quality of correspondence.
“They’re relentless at this,” says Ty McMahan, head of marketing at StellaService. “The level of attention, the product knowledge, the policy knowledge–they’re consistent across all channels.”
At the Northport customer call center 30-year Bean veteran Jayne Buckoff maintains a sample room filled with almost every product the company sells, from T-shirts to canoes. This way if an employee has to answer a detailed question, he or she has the item at hand. Buckoff also keeps a file cabinet full of yellowing instruction manuals going back 60 years.
“It’s for when a customer inherits their uncle George’s tent but doesn’t know how to set it up,” she says.
L.L. BEAN HAS A PLAN TO cut its waiting list down. Over the next few months the Brunswick factory will hire 100 new workers who’ll focus solely on the coveted Bean boot–a 25% boost to the company’s full-time shoemaking workforce. A second injection-molding machine will be installed so Bean can make enough rubber soles to keep up with demand.
It’ll soon be seeking a new crop of retail employees, too. In March CEO McCormick announced a plan to quadruple L.L. Bean’s brick-and-mortar footprint by 2020. Today the outfitter runs 25 stores in the U.S. The goal is to reach 100 in five years, while adding outlets in key overseas markets like Japan and China.
Next year the company will close its Bangor call center, where 220 people currently work full-time, a number that swells to over 800 in the busy holiday seasons. “Call volumes have dropped because of the Web,” says McCormick. “We have three call centers now, and we really don’t need three. It’s a transformation of the business from catalog to Web.”
He’s assured these staffers that they’ll be able to stay on as home agents if they’d like, answering e-mails and doing live chats. Those who aren’t keen will be offered severance pay. “We offered jobs to everyone,” he says, a signal to those in its workforce that Bean will take care of them, just as they take care of the company.
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