Donald Trump and the Plight of L.L. Bean
A presidential tweet. Boycotts. Buyouts. 2017 is off to a rocky start for New England’s most iconic brand. Can new CEO Stephen Smith help his company get back on the right trail?
On the second Monday of January, Stephen Smith, the 46-year-old head of L.L. Bean, arrived in Salt Lake City for a retail trade show. An avid telemark skier, he was tempted to blow off meetings and head to the nearby slopes of Park City, which were buried under 2 feet of fresh powder, but the 6-foot-6 executive was still recovering from a torn Achilles tendon and chose to hunker down at his hotel. There certainly was plenty of work to be done.
By all measures, it had been a turbulent 12 months as president and CEO for Smith, a marketing whiz who cut his teeth at Hannaford Supermarkets before a stint with Walmart International in China. There was the unsettling financial report in March 2016 that sales were flat; the company’s recall of 6,700 children’s water bottles due to lead contamination; the strange land feud with a cemetery association, over access to an ancient graveyard near L.L. Bean’s headquarters in Freeport, Maine; not to mention persistent operational problems, including a steady onslaught of Bean Boot look-alikes flooding the market.
During that trip to Salt Lake City, after a busy few days scoping out new gear for Bean’s sprawling product line and listening to manufacturers pitch the latest in high-performance microfiber technology, Smith’s mind raced with ideas that he could bring back east to help get New England’s most iconic brand back on track.
The distraction, however, was short-lived. On the final morning of his trip, he flicked on the TV in his hotel room, tuned into Fox News, and watched a disaster unfold. Appearing on Fox & Friends was board member and controversial Mainer Linda Bean, who had come under investigation by the Federal Election Commission for political donations she made to the pro–Donald Trump organization Making America Great Again. Despite an initial backlash, the 75-year-old heiress took to the popular morning show to defend her support of Trump and antagonize her progressive critics. “I’m not going to back down,” she said, looking grandmotherly in a bright-red turtleneck sweater, her rosy cheeks flushed. “I never back down.” Then she poked fun at Barbra Streisand for not following through on her promise to flee the country if Trump won the presidency and remarked on L.L. Bean’s tote bags. Smith knew it was bad PR, but what he didn’t know was that things were about to get a whole lot worse.
Not long after Linda Bean’s comments aired, Trump blasted an impromptu tweet to his roughly 20 million followers. “Thank you to Linda Bean of L.L.Bean for your great support and courage,” he proclaimed. “People will support you even more now. Buy L.L.Bean.”
Trump’s message landed with the subtlety of a hand grenade. Suddenly, the brand had been hijacked, those tote bags now symbols of political partisanship. By the time Smith returned to Maine later that day, L.L. Bean was snarled in one of the largest crises the 105-year-old company had ever faced. In an anti-Trump frenzy, longtime customers cut up their L.L. Bean credit cards, returned orders, and pledged allegiance on Facebook to competitors Patagonia and REI. It was mutiny. At the same time, Trump fans proudly said they’d follow their leader’s marching orders and buy Bean products in bulk as a show of solidarity. The Trump effect was tearing apart Bean’s carefully cultivated image, and there was no playbook the new CEO could turn to for help. “This is extraordinary,” Smith told me in the midst of the crisis, painfully aware that the brand’s reputation and thousands of jobs in Maine, including his own, were potentially at stake. “I never would have imagined that we would be where we are.”
Smith never thought running L.L. Bean would be easy. The company, after all, is a century-old family-owned business—more than 50 Bean family members remain associated with it, including six on the board of directors—with annual net sales of $1.6 billion. But this latest episode, a mere year into Smith’s tenure, was particularly difficult to swallow. From inside the company, it seemed like L.L. Bean’s sterling reputation and millions of dollars in donations to environmental causes were all but forgotten and replaced with a single, all-consuming word: Trump.
L.L. Bean is no stranger to battling forces beyond its control. Previous CEOs survived the Great Crash, the rise of e-commerce, and the Great Recession—emerging each time stronger than ever. Could a tweet really bring down what Black Tuesday had not? If there was hope for Smith, it was in the rugged resilience that’s encoded in the company’s DNA.
It all started in 1912 when outdoorsman Leon Leonwood Bean—tired of suffering from cold, wet feet while hunting game in the root-snarled wilderness of Maine—lashed a strip of leather to a rubber sole and christened it the Maine Hunting Shoe. To drum up sales, Bean mailed a flier to every person who held a nonresident hunting license. “You cannot expect success hunting deer or moose if your feet are not properly dressed,” it read. “The Maine Hunting Shoe is designed by a hunter who has tramped the Maine woods for the last 18 years. We guarantee them to give perfect satisfaction in every way.”
The pitch worked, and Bean received 100 orders. Unfortunately for customers, the boots were poorly made, and 90 percent of that first batch fell to tatters. Bean showed an early knack for customer service, though, and he stood by his guarantee—taking on a loan to refund the purchase price and fix the busted merchandise. In addition to the mail-order business, Bean kept a small store in Freeport, Maine, where he sold bait and buckshot to fishermen and hunters. To accommodate late-night shoppers, he installed a bell so they could wake him anytime they needed. In 1951, Bean removed the locks from his shop and proudly declared it open 24 hours a day, 365 days a year.
As sales grew, so did the company lore, aided by the likes of Ernest Hemingway, Babe Ruth, and Arctic explorer Donald MacMillan, all of whom proudly wore Bean’s gear. In an era when the mail-order-catalog business was king, Bean quickly mastered the art, and his illustrated covers became a fixture on coffee tables throughout New England and across the country. Inside, the pages were filled with everything a fashionable sportsman could desire—from fly-fishing rods, hunting knives, and canoes to snowshoes, flannel jackets, and winter gloves.
Leon Leonwood Bean remained in control of the company until he died in 1967 at the age of 94. In stepped his grandson, Leon Gorman. History has shown that industry scions are often less business-savvy than their forebears, but by all accounts, Gorman had the Midas touch that would take the company to even greater heights. In no time, he ratcheted up marketing efforts, expanded the product line, and opened the first stores outside of Maine. The company grew approximately 20 percent each year for 30 consecutive years. In 1995, L.L. Bean joined the exclusive club of billion-dollar companies.
Then, of course, the Internet came along and the whole world changed. The dual forces of economic upheaval and technological disruption upended the catalog model, and L.L. Bean’s sales stalled. Catalogs had been a $100 billion business at the start of the new millennium, and Bean was one of the biggest in the industry, mailing a staggering 200 million each year. Among the upsides to this approach was predictability: Based on the number of pages and products in the catalog, L.L. Bean could accurately forecast its sales and carefully control its inventory. But as search engines gave consumers around the world the ability to shop for flannels and snow boots whenever they wanted, catalogs lost their luster, and Bean struggled to adapt.