L.L. Bean confirms plan to cut 300 jobs

FREEPORT – L.L. Bean announced Tuesday that it will cut about 300 jobs from its year-round work force of 4,300.

The company said it had a solid financial year in 2002 but that the cuts were needed to remain competitive. Declining prices in the retail apparel sector, annual wage increases and increasing health care costs continue to put pressure on operating margins, the company said.

“This action is necessary if L.L. Bean is to remain competitive in today’s retail marketplace,” said Chris McCormick, L.L. Bean’s president and chief executive officer.

The retailer had one of its strongest Decembers in its history last year, thanks in part to a heavy advertising campaign and a free shipping promotion. McCormick said similar investments will be needed throughout the year if the company is going to grow.

Company spokesman Rich Donaldson said L.L. Bean enjoyed a 5 percent increase in unit sales during the fall season, which includes Christmas, but revenues remained flat.

L.L. Bean estimates net sales for its 2002 fiscal year, which runs through the end of February, to come in near $1.1 billion, down from $1.14 billion the previous year, Donaldson said.

The privately held company does not release information on its profits.

The company anticipates capturing more market share and increasing its sales in 2003 but with only modest revenue growth of about 1 percent, Donaldson said.

McCormick said L.L. Bean has started to reap the benefits of strategies adopted in the past few years.

Those include increased selectivity about the merchandise it sells, plans for retail stores outside of Freeport and a more strategic method for sending out its catalogs. In recent years, the company has mailed out about 200 million catalogs annually.

“We’re building momentum and delivering results on many fronts,” McCormick said.

The company expects that the dismissals will come over the next two months.