Gorman, Leon

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Gorman, Leon

(1934-)
L.L. Bean, Inc.

Overview

Leon Arthur Gorman is the president of L.L. Bean, Inc., the world's largest supplier of outdoor clothing and gear. The company's business was built on catalog sales and was founded by Gorman's grandfather, L.L. Bean, almost 100 years ago. But, when Gorman took the helm in 1967, L.L. Bean was ailing and not in the same shape it once was. By carefully reorganizing the company and introducing new marketing strategies, Gorman helped L.L. Bean increase annual receipts to nearly $900 million by the mid-1990s.

Personal Life

Born on December 20, 1934 in Nashua, New Hampshire, Leon Arthur Gorman was the youngest of three sons born to John T. and Barbara (Bean) Gorman. His father worked as a corporate executive and his mother was the daughter of Leon Leonard Bean (1872-1967). Leon Leonard Bean founded L.L. Bean, Inc. and developed it into a mail-order clothing empire and established a family fortune.

Gorman graduated from Bowdoin College in 1956 with a BA and immediately went to work as a merchandise trainee with Filene's of Boston. While in Boston, he served as a lieutenant in the U. S. Naval Reserve from 1957 to 1960. Later, he was employed by L.L. Bean in its Freeport, Maine corporate headquarters.

On February 1, 1964, Leon A. Gorman married nurse Wendy Goad. The couple have three children; Jeffrey, Ainslie, and Jennifer.

Gorman is a director for the Central Maine Power Co. and is on the board of directors for the Pine Tree Council of the Boy Scouts of America. He is a trustee of the Maine Audubon Society and a member of the Portland (Maine) Chamber of Commerce. In 1992, Gorman won the Entrepreneur of the Year Award given by Ernst & Young.

Career Details

Founded in 1912 by Leon Leonard Bean, L.L. Bean, Inc. made money selling the "Maine Hunting Shoe" to keep the feet of hunters, trappers, and outdoorsmen warm and dry. The business gradually expanded under the watchful eye of its founder to include clothing, hardware, and other outdoor necessities.

As Americans sought a good way for the entire family to "get away from it all," L.L. Bean. Inc.'s profits increased. The company's strategy was to present a simple, natural, and sentimental view of American life to its customers. The company practiced "old-fashioned" Yankee trapper philosophies which included their 100 percent money-back if not satisfied, guarantee.

In 1960 Gorman moved to Freeport to work in the family's business where he served as the company's vice president and treasurer. When Leon Leonard Bean died in 1967, it seemed the family fortune and the company that he helped create might die with him. According to Sports Illustrated, "(the company) had fallen into a profound snooze." Of all L.L. Bean's heirs, only Gorman wanted to take over the family business and he did not have much to work with. Sales had dropped to $3.5 million and profits had dropped to a mere $60,000.

Gorman found that employee performance was poor because nearly everyone was of retirement age or older. The products the company sold were outdated and the quality had stumbled. The store in Freeport was shabby and old and needed renovation.

L.L. Bean had resisted change while he ran the company, insisting every time a suggestion for improving the store was made, "I'm eating three meals a day now, and I can't eat four."

Gorman set out to revamp the company and make it successful once again. He boosted its advertising budget, conducted marketing research, and built up the traditional base in mail-order sales. He spent $12 million on modernization; streamlined the company's operations; and introduced a good employee retirement policy. He raised benefits and wages to boost morale and attract new employees.

Gorman even encouraged employees to test L.L. Bean products themselves while on tax-deductible field trips. Many of L.L. Bean's employees were avid sportsmen and immediately took Gorman's advice.

Gorman strove to create a work environment that was as comfortable as the clothing the company sold. Employees were encouraged to give input on how to better run the company and they still received regular and intensive training in L.L. Bean's corporate culture. The company also started offering after-hour sessions to help the employees with personal development issues and it started a strong tuition reimbursement program.

Within one year of implementing both internal and external improvements, annual sales at L.L. Bean, Inc. climbed to $5 million, and by 1975 this figure stood at $30 million. The enormously popular Preppie Handbook by Lisa Birnbach helped to set the tone for 1980s style and it dubbed L.L. Bean a "Mecca" for people who dressed in the "preppie" style. In 1981, sales soared by 42 percent and by 1985, L.L. Bean's annual catalog and retail store sales passed the $300 million watermark.

In addition to the growth in sales, the L.L. Bean store in Freeport, Maine that Gorman had totally renovated upon taking over from his grandfather had grown into the state's second largest tourist attraction. More than 2 million people visited the store in 1985 and the figure continued to rise, with 3.5 million visitors counted in 1995.

In the early-1990s, L.L. Bean, Inc.'s sales started to taper off. This was partly attributed to changes in style, though the essence of L.L. Bean's clothing was that it does not go out of fashion. More likely, the cause was the nationwide recession and the increases in postage costs, which hurt the mail-order business.

To make up for the slow down in sales, layoffs at L.L. Bean, Inc. followed. This was a serious issue in a company that valued its relationship with its employees. But Gorman went into action quickly, cutting costs in some areas while expanding a few product lines and building up the enormously profitable Japanese market. By the mid-1990s, the company was continuing to grow, though not at the breakneck pace of the 1980s.

Gorman has prepared L.L. Bean, Inc. for more modest growth in the late-1990s than what it experienced in the early-1980s. To this end, the company has set up highly favorable severance and early retirement programs for its employees to cut down on payroll costs. Meanwhile, the company's presence in Japan continues to grow and it regularly receives orders from every corner of the globe.

Chronology: Leon Gorman

1934: Born.

1956: Graduated from Bowdoin College.

1956: Became merchandise trainee with Filene's of Boston.

1957: Entered the U. S. Naval Reserve as a lieutenant.

1960: Appointed treasurer of L.L. Bean, Inc.

1967: Took over control of L.L. Bean, Inc.

1985: Boosted L.L. Bean's sales to the $300 million mark.

1992: Received Entrepreneur of the Year Award from Ernst & Young.

1997: Recognized as a trendsetter by the U.S. Department of Labor for refusing to do work with overseas sweat shops.

1998: Supervised 180,000 daily catalogue orders and $1 billion in annual sales.

L. L. Bean, Inc. continues as a family enterprise, even with worldwide operations. It is one of the world's largest mail-order businesses, with sales approaching $1 billion per year. In 1995, the company reported 4.5 million customer sales annually, and telephone representatives continue to report daily orders of 150,000. By 1998, that figure had grown to 180,000 daily orders and over $1 billion a year in annual sales.

Expanding sales continue via the company's Internet web site, (www.llbean.com) and through expanded outlet stores worldwide. The main store in Freeport, Maine has been open for business 24 hours a day and 365 days a year ever since 1951.

Social and Economic Impact

L.L. Bean, Inc. was one of the companies listed on the first United States Department of Labor "Trendsetters Report" in January 1997. The report honors companies who refuse to do business with overseas manufacturers that use "sweatshop" labor. "Sweatshop" labor is defined as utilizing the labor of men, women, and even children who work in highly unpleasant environments for very low wages. Most often this type of labor occurs in underdeveloped countries where labor unions or worker's rights groups are not active.

Gorman's grandfather, L.L. Bean himself, formed the company on simple and solid values. "In running L.L. Bean on a daily basis," Gorman said, "we have been most successful by applying what my grandfather called his Golden Rule: Sell good merchandise at a reasonable profit, treat your customers like human beings, and they'll always come back for more." Part of the genius of L.L. Bean, the company and the man, was to make an art of simplicity. This genius has since been carried on profoundly by his grandson.