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RetailL.L. Bean

Why L.L. Bean is finally teaming up with other retailers

Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
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Phil Wahba
By
Phil Wahba
Phil Wahba
Senior Writer
Down Arrow Button Icon
October 5, 2020, 1:20 PM ET
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L.L. Bean is turning to a new source of help to lift sales: other retailers.

The Freeport, Maine-based L.L. Bean, beloved for its iconic duck boots and fleece sweaters, has always kept tight control over how and where its products are sold, exclusively using its own stores, catalog, and website to build what is now a roughly $1.5 billion annual business.

But the brand’s limited store fleet of 54 locations, and the need to reach a wider clientele are now prompting it to move beyond so-called ‘direct-to-consumer’ selling by branching out into wholesale. L.L. Bean will soon be selling some of its products at Nordstrom, adding to roster of new retail partners that includes Staples and Midwest sporting goods chain Scheels All Sports. 

Asked why the 108-year-old L.L. Bean was gingerly testing the wholesale waters after all these years, CEO Stephen Smith tells Fortune, “The simple answer is, to expose new customers to the L.L. Bean brand.” As beloved as the brand is, he concedes, many shoppers don’t have it top of mind, or think L.L. Bean is only about fleece or flannel, while its assortment actually includes things like furniture, bikes, and fishing gear. And that is dangerous at a time when rival brands like Patagonia and The North Face—which are widely sold beyond their own stores including at Nordstrom—tend to have a higher profile with shoppers. 

“We are so well known as a brand but we don’t always have such great brand relevance to customers,” Smith continues.

That will soon change, he hopes. This back-to-school season, L.L. Bean sold backpacks and water bottles at Staples. And next month, 20 Nordstrom stores and the upscale chain’s website will start selling a subset of L.L. Bean products including its Bean Boots and some fleece and flannel items. 

L.L. Bean’s selling entirely via its own channels to working with wholesalers contrasts with a wider retail trend that is seeing many brands, most notably Nike, reduce their exposure to retailers like department stores and shift more business to their own stores and websites. Other such brands include Levi’s, Coach and Ralph Lauren.

But while the approach differs, the goal is the same: striking the balance between maximizing a brand’s reach and ensuring it is presented as well at a wholesaler as in its own stores.

“We’re doing the same thing, but starting from different directions,” Smith says of Nike’s strategy. At the same time, he says, “We don’t want to get to a place where we are overly reliant on the health of somebody else’s business.”

Nordstrom’s business has been severely hurt by the pandemic and a shift away from fancier clothes as fewer people go to the office or to special events. But the Seattle-based retailer, family run just like L.L. Bean, is prized as a wholesaler for how it showcases brands with nice presentations rather than the shabby displays common at other department stores. What’s more, Nordstrom’s reputation for good customer service struck a chord with Smith, whose company is renowned for its generous returns policy. And Nordstrom caters to the affluent customer L.L. Bean is aiming for too. 

“We wanted to be sure we were in an environment with the same type of customer service,” says Smith. For Nordstrom, the partnership allows it to further build up its active wear assortment. In another example of L.L. Bean trying new partnerships, the brand is launching a collection with men’s wear designer Todd Snyder, its first such collaboration.

Smith, CEO since 2016, says that the exploration of wholesale partnerships began a couple of years ago to help L.L. Bean diversify its sources of revenue. And the L.L. Bean could use a boost: sales slipped 3% to $1.5 billion in 2019 and are on track to be down slightly again in 2020, this time because of the pandemic which shut stores for weeks, overshadowing an online sales jump that continues. 

To be sure, sales of many products exploded for L.L. Bean as Americans worked from home and took to the outdoors, with products like quilts, outdoor furniture, and more recently, down puffers leading the way. But those categories have lifted its competitors too.

Yet L.L. Bean is in no rush to go too far down the wholesale road, or to set a sales percentage target for wholesale, though Smith says that share is unlikely to exceed 25% and could be far less. So don’t expect L.L. Bean product to show up at a million stores in your town anytime soon.

Says Smith: “This is a test, we’re very clear.”

About the Author
Phil Wahba
By Phil WahbaSenior Writer
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Phil Wahba is a senior writer at Fortune primarily focused on leadership coverage, with a prior focus on retail.

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