Gorman, Leon Arthur

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GORMAN, LEON ARTHUR


Leon Gorman (1934) was president of L.L. Bean, the world's largest supplier of outdoor clothing and active gear. The company's business, founded by Gorman's grandfather, L.L. Bean, in 1912, was built on catalog sales and a reputation for conservative styling, high quality merchandise, and customer satisfaction. L.L.Bean's guarantee was unconditional; no matter how long a customer owned a product it could always be exchanged for a replacement or for a refund.

When Gorman became president of the privately-held family company in 1967, L.L. Bean was in serious trouble. Throughout the last years of his grandfather's life, he had made sure his company retained its oldfashioned business practices, limited growth, and only slowly accommodated to modern technology. According to John Skow, writing in Sports Illustrated, the company "had fallen into a prolonged snooze." Sales had dropped to $3.5 million and profits to a mere $60,000.

Gorman found that employee performance was poor partly because nearly everyone was of retirement age or older. The products the company sold were outdated; quality had slipped. L.L. Bean's landmark store in Freeport, Maine, had become shabby. Under Gorman, L.L. Bean was completely overhauled as he boosted advertising budgets, conducted marketing research and expanded the company's traditional mail-order sales base. Gorman spent $12 million in modernization, streamlined the company's operations, and introduced a retirement policy. Along the way he increased benefits and wages to boost morale and attract new workers.

For more than two decades, the company's revenues soared. L.L. Bean posted double-digit revenue growth in the 1970s thanks to a boom in outdoor sports. The company followed that up with more growth in the 1980s when the "preppy look" enjoyed widespread popularity. Strong international sales of its products, particularly in Japan, also helped make L.L. Bean an industry giant. By 1985 Gorman had boosted company sales to $300 million. In 1992 he received the Entrepreneur of the Year award from Ernst and Young.

By 1999 the company had grown into one of the world's leading international mail-order firms with sales of some $1 billion a year. L.L. Bean was selling more than 16,000 products through catalogs, the Internet, a retail operation in Freeport, eight retail stores in Japan, and nine factory outlet stores. More than 4.5 million customers placed orders from all over the world; as many as 180,000 orders a day were received by phone. Yet growth slowed significantly throughout the 1990s. After dropping in 1996 sales grew by only a sluggish 2.9 percent in 1997. According to Business Week 's William Symonds, L.L. Bean was "firmly stuck in the past."

Analysts placed the blame partly on the conservative styles of L.L. Bean's khakis, parkas, and sweaters, on Gorman's reluctance to move into children's clothing, and retail outlets that operated outside of Maine and Japan. As L. L. Bean's sales slowed, other retailers in the often-cutthroat mail-order businesses, such as Lands' End and J. Crew, caught up and passed the venerable company in some areas of its business. According to Business Week, the overall number of catalogs mailed out each year in the U.S. jumped from 7.8 billion in 1982 to 13.9 billion by 1998 making the Bean catalog easily lost in the pile. In addition, other rivals, such as The Gap, gained a very strong foothold in retail stores.

Gorman vowed to fight back and his goal, he said, was to add $300 million in sales by 2001 and triple pretax profits. He announced plans to locate a 100,000-square-foot superstore along with several smaller nearby satellite shops in the Mid-Atlantic region. A full fashion update of Bean's standard clothing line was on the books as was a specialty catalog, Freeport Studios, featuring dressier clothes for women of the baby-boom generation. Gorman also pledged to double marketing spending, including its biggest ever television advertising campaign, to $26 million. He also reorganized L.L. Bean's corporate structure into business units responsible for specific sales areas.

See also: Leon Leonard Bean, Mail-Order House

FURTHER READING

"Bean Sticks To His Backyard." Economist, August 4, 1990.

Brubach, Holly. "Mail Order the United States." New York Times Magazine, November 21, 1993.

Skow, John. "Using the Old Bean." Sports Illustrated, December 2, 1985.

Symonds, William C. "Paddling Harder at L.L. Bean." Business Week, December 7, 1998.

"The Company Behind the Catalog: The Story of L.L. Bean," [cited July 21, 1999] available from the World Wide Web @ www.llbean.com/.

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