L.L. Bean Does a Reboot. Who Knew That Change Was Its Bag?

L.L. Bean’s powerhouse product is its influencer-touted Boat and Tote canvas bag. The company made 720,000 of them last year alone. (Courtesy of LL Bean/Wooden Sleepers)

With the flurry of economic reports and tariff news this past week coming faster than a Shohei Ohtani fastball, Barron’s readers might be forgiven for being seduced by myriad zigs and zags. And yet, as Mr. Market often reminds us, it’s best to ignore much of that and focus on the bigger picture.

In fact, happy manifestations of long-termism abound across America. In midcoast Maine, where I’m currently bunked down, there are numerous examples, including at the Farnsworth Art Museum in Rockland. William Alden Farnsworth was a local 18th-century mogul with interests in kilns, quarries, real estate, and shipping. His daughter, Lucy Copeland Farnsworth, who died in 1935, multiplied the family fortune fivefold over her 96 years through investments in equities and real estate.

Inside the museum are ties to more recent fortunes, such as Jamie Wyeth’s Iris at Sea, Study #2, bequeathed by Elizabeth Noyce, ex-wife of Robert Noyce, who co-founded Intel 57 years ago. Elizabeth owned hundreds of millions of dollars of Intel stock, died in 1996, and was called “Maine’s premier philanthropist and most innovative investor.” Her daughter, Penny Noyce, continues that work through the Libra Foundation, which most recently had some $170 million in assets.

The Farnsworth has an impressive collection of Wyeths, that first family of American painters, which includes N.C., Andrew, and Jamie, best known for Andrew’s Christina’s World. As you may know, the subject, Christina, is lying in a field in front of her home, the Olson house, in Cushing, Maine. But did you know that house was later owned and subsequently given to the Farnsworth by John Sculley, former CEO of Apple ?

Another Wyeth enthusiast was Linda Bean, granddaughter of Leon Leonwood Bean, founder of Maine retailer L.L. Bean. Linda, who died last year and dabbled in conservative politics, collected some two dozen Wyeth paintings, later auctioned off for $2.5 million. Her company, Linda Bean’s Perfect Maine, operates a lobster processing business, restaurants, stores, and the N.C. Wyeth Research Foundation and Reading Libraries. Linda was also on the board of L.L. Bean, which is 100% controlled by the family.

As it turns out, there are other big changes afoot at L.L. Bean, with a $50 million reboot of its iconic campus in Freeport and CEO Stephen Smith stepping down. Smith, who previously worked at Walmart and was the first outsider to run Beans, as it is sometimes called, in its 113-year history, will have been CEO for a decade when he decamps next spring.

“Ten years is also a natural inflection point—a clean milestone that allows for reflection and renewal,” Smith wrote to me in an email. “The company is in a strong place: We have a clear vision and momentum across the business.”

“This is kind of a victory tour for Steve,” says Maine native Dave Roux, managing partner of investment firm BayPine. “He came in at an incredibly challenging time for the business, where things had gotten a little fuzzy. Steve focused the strategy, upgraded the team, refurbished the brand, improved sourcing, and started really using data analytics.”

And yet Smith’s departure raises some timeless questions for L.L. Bean, which operates 65 stores in the U.S., plus 25 in Japan and 14 in Canada. Can the company keep up with competitors like REI, Patagonia, North Face, and Stio? Can Beans make its apparel more appealing—or even cool? Will the company seek outside capital or go public?

Then there’s top-line growth. In 2024, revenue came in at $1.7 billion, down from a peak of $1.8 billion in 2021. The company doesn’t release profit figures, but its employee bonus performance payout dropped from 20% in 2021 (12% cash, 8% 401(k) contribution) to 6.5% last year.

Before you call in the management consultants, recall that L.L. Bean has shifted gears previously in its 100-plus year history, morphing from a single store to a direct-to-consumer powerhouse via its ubiquitous catalog. (In 2007, the company sent out 375 million of them.) True, it was late to back-office technology, bricks-and-mortar expansion, and the internet, but figured it out.

Still, much is riding on the next, yet-to-be-selected CEO as well as Shawn Gorman, the executive chairman and great-grandson of founder Leon Leonwood, who ran the company from 1912 until his death in 1967 at age 94. (The story has it that his middle name may have been originally “Linwood” and accidentally changed to “Leonwood.”) A true Mainer, L.L. was crusty with an extra-dry sense of humor. An example of the latter, directed to those out in the woods: “If you get lost, come straight back to camp.”

Leon Gorman, L.L.’s grandson and Shawn’s uncle, ran the company from 1967 to 2001. “Leon Gorman really built the business,” says U.S. Sen. Angus King (Ind., Maine). “When he came in, the company had sales of like $3 million, and when he left it was $1 billion. Leon was kind of a genius. I remember a story where he said at a company meeting, ‘I think we should put Hawaiian shirts in the catalog.’ And everybody said, ‘You’re crazy, people don’t want Hawaiian shirts.’ And they sold like hot cakes.

“Clearly, L.L. Bean profited from its association with Maine,” King says. “It has this brand of outdoors, quality, integrity, and fortunately, that’s Maine’s brand. The development of L.L. Bean and the growth of Maine sort of go hand in hand.”

Only a few states—California and Texas among them—have an identity as strong as Maine’s (lobster, wild blueberries, rugged coast), and the state certainly punches above its weight, considering its population (No. 43) and gross domestic product (No. 44) rankings. Thousands of Maine businesses monetize the state’s attributes, but none more so than L.L. Bean. And yet Beans’ $1.7 billion in revenue doesn’t crack the National Retail Federation’s top 100 U.S. retailers list. (No. 100, with $4 billion in sales, is St. Louis–based Schnucks.) Like its home state, L.L. Bean’s mindshare exceeds the data—which is both a problem and an opportunity.

At Beans’ flagship store in Freeport, where in its shadow the cutesiest outlet town in America has blossomed, the massive renovation makes for some discombobulation. The apparel shop has been moved into a 28,000-square-foot tent. Inside, I found much of the attire not so appealing, but 1) an editor once told me I lacked the sartorial gene, and 2) I’m probably pining for my 1980s Official Preppy Handbook glory-years staples (green felt hat, cream-colored chamois shirt, navy Norwegian sweater).

Other departments on the 220,000-square-foot campus, visited by three million customers each year, resonated more. There’s the Hunting and Fishing building, open 24 hours a day (“No locks on the door,” an employee says), originally to accommodate hunters coming from New York or Boston who would stop for supplies on the way to camp. Inside are thousands of wet and dry flies, midges, nymphs, and terrestrials, and scores of long guns (“excellent moose options”) leaned up in racks, some adjacent to brimming jugs of maple syrup.

Beans’ Home Store, organized by zones like “blueberry” (which includes blueberry foods, themed dishware and cushions, and even the Robert McCloskey classic Blueberries for Sal), was well-curated enough to impress even Ralph Lauren. “If I had a house in Maine, I would furnish it from L.L. Bean,” a wealthy woman from Washington, D.C., tells me. To be clear, though, L.L. Bean is that rare bird that appeals to red-staters and blue-staters alike.

L.L. Bean’s powerhouse product is its Boat and Tote canvas bag, first sold in 1944 to carry ice, and which like the Maine Hunting Boot, is still made in the state. An influencer blew the bags up when she began posting the Boat and Totes of customers who had monogrammed spicy messages (“Psycho,” “Tax Evader,” “Piper Nooo”) on their bags. Vintage Boat and Tote bags now go for hundreds of dollars (as opposed to roughly $50 for a new medium-size bag with a monogram).

The company made 720,000 bags last year, which Smith says have brought in “more new buyers than any other category for the past four years.” L.L. Bean recently sued a company that was touting a “Boat Tote” line of bags. (The lawsuit includes pictures of Hailey Bieber, Chloë Sevigny, and Reese Witherspoon with their Boat and Totes.) It subsequently dropped the suit, and “Boat Totes” are no longer for sale on the defendant’s website.

L.L. Bean has some 5,400 employees, with 2,600 in Maine, as well as 3,700 seasonal workers—needed when you sell eight pairs of Wicked Good Slippers a minute in peak season. Working the store can generate serious yarns. “It was January 1978 and I recognized a customer in the men’s clothing section,” says Stu Roberts, hired by Beans out of college. “I was pretty sure I had seen him on Saturday Night Live. Yes, it was the future U.S. senator, Al Franken, with his mother and girlfriend trying to outfit him. I joined in helping find Al the appropriate tweed hat to go with his new L.L. Bean outfit. There were a lot of great jokes made about his new look.”

Roberts never got his dream job at Beans. “I interviewed for an opening in product development, the sexiest department,” he recalls. “The interview included a visit to a psychologist’s office, who gave me two hours of personality analysis tests.” Roberts’ report came back saying L.L. Bean shouldn’t hire him because he wasn’t team-oriented. “The psychologist said, ‘Stuart wants to go where angels fear to tread.’ In September 1978, I relocated to Colorado and began my career as an investment manager. I would go to many places angels feared to tread.”

To those who say L.L. Bean should take a few more risks and venture to where angels fear—remember, that is where fools rush in. Or it could fatten the bottom line by short-shrifting customers and employees, though that would draw L.L. and Leon back from the dead, shotguns primed. Instead, L.L. Bean reminds us that while longevity doesn’t come easy or cheap, practiced right it can be rewarding in oh so many ways.

Write to Andy Serwer at andy.serwer@barrons.com