Understanding Family Enterprises
Book Review Assignment
October 2, 2015

L.L. Bean: The Making of an American Icon

“Sell good merchandise at a reasonable profit, treat your customers like human beings, and they’ll always come back for more” (pg.14) was the Golden Rule of, L.L. Bean’s founder, Leon Leonwood Bean. Growing up in Maine, Leon, more commonly known as L.L., started his outdoor supplies company with the foundation of his newly created Maine Hunting Shoe and the idea that people like him would like the same things as him. The business started in Freeport, Maine, a small shoe factory town, as a small retail store and catalogue in 1917, and continued to earn a name for itself and grow as the years went on. It is said that L.L. grew a “loyal following” (pg.12) and people were interested with what was going to come out of his company. L.L. accomplished his goals and eventually passed the company down to his son and then his grandson. This book is a story by his grandson, Leon Gorman, about the start of the company, his journey through it, and the company present day. Although L.L. Bean, a well-known brand now, has gone through many ups and down since it’s small town origin, it has still kept the gold rule of its founder, which has helped it remain successful. Leon Gorman, L.L. Bean’s grandson, and graduate from Bowdoin University, begins his story about his family enterprise by telling us how he was introduced into the business and the factors that led to the success of the business. Gorman was honorably discharged from the United States Navy in May of 1960 and wanted to find new work right away. It was suggested to him to visit his grandfather’s small shop in Freeport, Maine to find a job. Having military experience and a college degree his grandfather hired him, although it was told, “he’d never turn down a family member looking for work” (pg.5). Gorman had learned right away that this company had a very personal shopping experience. Each employee got to know the customers and was well informed on all of the products. The main products at the time were the hunting boots, but the store was also filled with specialty outdoor equipment, such as fishing and hunting gear. The company had started, on the second floor of a large building in Freeport, Maine, above a post office and a barbershop. L.L.’s brother, Guy Bean, was the postmaster from the post office downstairs. This meant that orders could be processed and delivered with top priority all the time, which helped L.L. gain his customers. Customers also enjoyed the way that they were treated in the stores. They felt like they were a part of what was happening, and L.L. believed that this was the key to success. He believed in his golden rule so much that he hand wrote the monthly catalogues that were sent out, including little side notes about the products and specialties, that people enjoyed reading. L.L. was like a celebrity at one point due to his uniqueness, and was featured in magazines and newspapers such as Sports Illustrated and The New Yorker. The company was very popular at its start and began expanding before the 1960s. L.L. decided in 1951 that the store would now be 24 hours 7 days a week. The store was also added onto, to make more room for production and sales. Because the add-on was made to the original building, the inside of the store had outdoor paneling on the inside. This later became a common factor of all L.L. Bean stores. The employees enjoyed working there and the customers felt at home. L.L. had grown his company to what he wanted it to be. L.L. created a “lively place to work” (pg.14) and to be a part of. He sent exhibits to different shows, created places to practice shooting, and was involved in town affairs and schools boards. His employees were all friends and neighbors with each other and with the customers. The company was at its peak in the 1930s. The values of treating everyone like a human creating a person experience, and the involvement that L.L. had within the business and the community, were some factors in the success of the company. By the time his grandson, Gorman, started working there, the company was not the same. L.L.’s son, Carl Bean, was the general manager at the time and L.L. was still in charge. L.L was getting older and was not as involved in the company. He no longer wrote the catalogues himself, he only edited them. This was a personal tradition that many customers relied on. That catalogue was also printed on bad quality paper, because of the economy, so people were not as pleased as they used to be. The loyal customers were used to getting a certain quality catalogue, but things were changing. Different family members joined the team as well, such as L.L.’s wife Claire, who wanted to introduce new products to the lines, like nursing shoes and waterproof pipes. It was hard to have any new products at this time because L.L.’s employees and customers were all drafted into World War II. The majority of products made (boots, supplies, and bags) were shipped overseas to soldiers during the war, and that is what was carrying the business. Gorman also knew that Abercrombie & Fitch was the top competitor, but no one else really cared as much. This caused friction between L.L. and his family because the company was not doing as well as they used to and they did not know was to do to fix it. There was also a huge lack of communication in the family system. L.L. was getting older and the company was in need of some new ideas. Gorman was called back to active duty during WWII, but before he left, came up with new products to add to the catalogue. It was only when he returned that he found out that after he left the company made a rule that all new products must be approved by the board before being added to the catalogue. With this enforcement, it was very difficult for him to help improve the company. L.L. died in 1967 and his son Carl took over. As time was approaching the 1970s, women’s apparel was becoming a topic of discussion for the products of the company. Many people who were loyal employees and customers did not want to change what was built by L.L., but Gorman knew that something had to be done in order to keep its success. Gorman was faced with boundary issues when L.L. was alive, but more when Carl was in charge. Although Carl rightfully took over, the roles and responsibilities of the men were unclear at times. They both had different visions for the future though, as did the mix of customers. People who were more into style wanted to see more products, but loyal customers wanted to stick with only the outdoor products that originated with the company. They ended up having to split up the company into different sections and make specialized catalogues. This was somewhat of a zero-sum outcome because the two men couldn’t get what they wanted unless they split the business up. This was a difficult decision to be made in the company. Unfortunately, Carl died in October of 1867, 8 months after his father. This left the future of the company and the decisions in the hands of Gorman. He knew what was best for the company and how to alter it to continue to grow, but not change the original values that it had. This is an example of effective commitment because Gorman had a desire to continue the family business and to make it better. He created a place that was now reaching out to a younger demographic because of the “look” the products had as opposed to their durability (pg.144). He grew the company so much that he doubled it in size every three years for the next eight years after 1967 (pg. 62). The company got its first computer in 1972, which started better organization of orders as the company grew. Gorman also hired Bill End, a Harvard Business graduate, as L.L. Bean’s marketing director. He and End helped positively change the brand forever. They even changed the logo to say “Outdoor Sporting Specialties” instead of “Hunting Fishing and Camping” (pg.137). He wanted to run the market that they were in, but still stick to what was started by his grandfather, and he did a good job in doing so. L.L. Bean is now a highly successful worldwide company with over 30 retail stores and outlets in New England alone. The started opening retail stores outside of Maine in 2002. The original location in Freeport, Maine is still open and operating 24 hours a day, 7 days a week, and has added and Outdoor Activity school. Each store has high quality products and even products that have been around for decades, such as the original Maine Hunting Boots, which are still in high demand this winter. Each store is also themed to look like the outdoors, with wood paneling and green carpet, thanks to Bill End and Leon Gorman. The company had its low points but essentially grew to the enterprise that it is today. Gorman retired in 2001, but remains a Chairman, and the new president is Chris McCormick, who continues to help the company grow. L.L. Bean, a family business that was started by one man, passed down to the third generation, is now a successful company run by a non-family employee. From this story I learned important things about family businesses. I got more information about how difficult it is to change a company that has been around for so many years. As times change, people’s wants and needs change, so the products of a company have to change with that. This is difficult because the brand was built on certain products, so it is hard to not warp the company into something different. I also learned that with companies that have such strong foundations, keeping the original values is very important. This helps keep the loyal customers as well continues to bring in new customers. It is helpful for a company to have base values when being passed through generations. The story of L.L. Bean was very interesting and taught me a lot about family businesses.