L.L. Bean's sales dipped slightly over the past year, forcing the elimination of worker bonuses for the first time since 2008, but the CEO told workers on Friday that changes adopted in recent months are putting the company on a "path to a more prosperous future."
The Maine-based outdoors retailer announced annual revenue of $1.6 billion, which was nearly flat, for its fiscal year that ended on Feb. 25.
CEO Steve Smith said nearly 500 workers took advantage of a voluntary early-retirement program and that another 100 jobs will be eliminated early next month. There will be a net loss of 400 jobs after some jobs are refilled. L.L. Bean employees 6,000 people.
The workforce reduction, a tightening of the company's returns and shipping policies, and pension changes are part of cost-cutting efforts.
"The work we accomplished this year will create new opportunities for growth and improved performance for many years to come," Smith told workers in a memo.
L.L. Bean is coming off two years of flat sales. But the company continues to invest in the future, opening six stores in the past year, bringing the total number of stores outside Maine to 35, and there are plans to open five more stores in the coming year, Smith said.
It has been a year of big changes.
L.L. Bean announced it was changing its pensions and reducing its workforce, and sharpened its outdoor focus with a "Be an Outsider" campaign.
It shocked some shoppers by changing its "satisfaction" guarantee, something long considered sacrosanct, by imposing a one-year limit on returns of most items. It also eliminated free shipping on all products, imposing a $50 minimum.
Smith said adjustments to returns and shipping policies collectively represented one of the "largest and most critical" changes in the 106-year-old company's history.
"The rollout went extremely well, from marketing, communications and operations perspectives, and customer and public sentiment continues to be mostly positive," he wrote.
Retail analyst Walter Loeb said it has been a tough period for retailers, and that most are responding like Bean, by cutting costs and refocusing on their core customers.
"The trend is to be leaner, to be very aggressive in cutting back, so that you can be profitable with the customers that you maintain," he said.