L.L.Bean CEO: Congress needs to step up for ‘middle market retail’
Grocers, mass merchandisers and warehouse clubs may be doing big business with consumers stocking up on everyday staples as the realities of social distancing and stay-at-home orders become all too real for millions of Americans. While these essential retailers are looking to hire workers to meet growing demand, others in apparel and other non-essential categories are closing stores across the country and furloughing workers in numbers unprecedented in the retail industry and nation’s history.
Congress has stepped in with a number of pieces of legislation to help ease the pain being felt by so many, but it still has work to do, according to L.L.Bean CEO Stephen Smith.
In an interview with CNBC’s Courtney Reagan, Mr. Smith contended that the recently passed $2 trillion stimulus package does not address “middle market retail” companies such as his. Essential retailers are continuing to operate, he said, while smaller retailers with fewer than 500 employees are eligible for Small Business Administration loans. The middle market, he said, employs up to 30 million workers, either directly or as vendors.
“All of those apparel retailers, every label of a piece of clothing that someone is wearing right now, all of them are struggling mightily with full rent, full payroll and, if they’re store-based, close to zero sales,” Mr. Smith said.
L.L.Bean has closed its stores but continues to fulfill orders placed online and on the phone.
A message posted on the Bean website says the retailer has implemented “temporary measures such as voluntary unpaid days, extended lack of work programs as well as reduced workweeks and reduced pay for salaried employees across all levels. This will allow us to continue to offer medical coverage for our hardworking employees and help them quickly return to serve our customers when stores are back open and business resumes.”
Like other companies that have stepped up in this crisis, Bean is employing workers to make face masks for medical workers. The material used in the masks comes from the company’s dog bed liners, which Mr. Smith described to CNBC as being breathable, durable and washable.
“A number of our employees said, ‘Hey, we are the best stitchers, cutters and sewers. We make the best boots in the world. … We can make masks, gowns and booties as well,’ and they immediately started experimenting,” he said.
Bean expects to turn out about 10,000 masks a day by the end of this week. The masks are being tested by the Massachusetts Institute of Technology.
- L.L.Bean CEO says Congress must do more to address ‘serious’ retail crisis – CNBC
- COVID-19 – An Update for our Customers – L.L.Bean
- Canceled orders and furloughed employees are part of today’s retail reality – RetailWire
- Crocs, Walmart, Unilever and others have stepped up during the coronavirus outbreak – RetailWire
DISCUSSION QUESTIONS: Do you agree with L.L.Bean CEO Stephen Smith that Congressional action is needed to support “middle market” retailers negatively affected by the coronavirus outbreak? If so, what form should that assistant take? How quickly do you expect companies such as L.L.Bean to rebound once the current situation has passed?