Cabela’s sporting goods store, the proposed anchor to a huge development planned for Scarborough’s Haigis Parkway, isn’t worrying many about competition with L.L. Bean.
When it comes to sales competition, town and state officials and L.L. Bean are not concerned with the possibility of the first Cabela’s store opening in Maine. The arrival of the Nebraska-based company, some say, would only serve to increase traffic to Maine and L.L. Bean.
“Cabela’s would be good for the state and the town,” said Scarborough Town Manager Ron Owens. “I don’t think competition is bad. It’s good for everybody, even for L.L. Bean.”
L.L. Bean spokesman Dave Teufel agreed, saying that the company is confident that the arrival of a Cabela’s would not cause sales problems.
“We have very strong loyalty among our customers,” said Teufel. “We don’t expect that to change.” He added that he hopes Cabela’s would create more traffic to Freeport.
The only problem, said L.L. Bean Spokesman Richard Donaldson, would be the sales tax exemption Cabela’s has asked for.
Cabela’s asked the state that Internet and catalog sales, which account for over half of its total sales, to be exempt from the 5 percent sales tax. Its argument is that Cabela’s is actually three separate companies, Internet, catalog and retail. L.L. Bean is a privately owned with everything included in one company. According to Donaldson, Internet and phone sales account for 80 percent of the company’s sales.
Sen. Lynn Bromley (D-South Portland), who is on the Business and Economic Development Committee, recently said she supports any necessary legislation to see that Cabela’s retail store can be exempt from the tax. Though she does not believe Cabela’s would hurt L.L. Bean, she said that it’s not the state’s responsibility to shield it from other competition.
“I think that it’s just not anything to worry about,” she said. “It’s not the state’s job to protect the industry. It’s our job to bring really good economic development to the state.”
According to Donaldson, the competition is welcome but not the sales tax exemption. L.L. Bean does charge sales tax for all sales no matter what state they are in.
“It’s a matter of principle for us,” said Donaldson. “We do not think that’s right.”
“For us to be penalized because we have our headquarters in Maine would not be fair,” he said. He added that L.L. Bean has always invested in Maine and will continue to do so.
‘Well anchored’
If Scarborough does allow Cabela’s to come, it would be 25 miles south of L.L. Bean’s flagship store in Freeport. Cabela’s buildings are usually large, ranging up to 247,000 square feet. They include everything from indoor aquariums with local fish to displays filled with animals from all over the world. According to Cabela’s representative Ed Eckman, the stores often become the top tourist attraction in their states.
The Cabela’s in Scarborough, though, would actually be smaller than L.L. Bean’s main Freeport store. L.L. Bean is 160,000 square feet, and the proposed Cabela’s is 130,000 square feet. L.L. Bean also has other stores in Freeport, including the factory store, hunting and fishing store and its bike and boat store for a total of about 200,000 square feet.
“We are very well anchored in Maine,” said L.L. Bean spokesman Richard Donaldson.
L.L. Bean was founded in Freeport in 1912 by Leon Leonwood Bean, and is still privately owned, unlike Cabela’s, which is a publicly traded company. L.L Bean began as an outdoor clothing and shoe store, and sent out just one version of its catalog.
In 2005 L.L. Bean employed about 4,000, created 61 different catalogs and sent out 250 million to all 50 states and 140 countries. They also had 14.5 million customers phone in orders, and at its busiest day 85,000 orders were placed online. Last year total sales for L.L. Bean reached $1.47 billion.
A broader portfolio
Dick Cabela founded Cabela’s in 1961, though its first store wasn’t built until 1987 in Kearney, Neb. Cabela’s existed for almost 30 years as a catalog-based company. Unlike L.L. Bean, which started as a clothing and shoe store, Cabela’s began by selling fishing gear.
According to Teufel, there is still a difference between L.L. Bean’s original emphasis on clothing and Cabela’s on equipment.
“We have our own demographic, and certainly there is some overlap,” said Teufel. “But we do quite a bit more in the softer clothing line, and they do a lot more in the hunting and fishing line.”
“Our portfolio is broader, and though we have a strong hunting and fishing department we have a wider assortment, including select home furnishings,” said Donaldson.
Last year, Cabela’s sent out 76 different catalogs, including specialty catalogs for sports such as archery, fly-fishing and boating, as well as its famous hard-bound, 500-page master catalog. Cabela’s also mails to all 50 states and about 120 countries, with a total of about 122 million catalogs mailed last year. Catalog and Internet purchases account for about 62 percent of the $1.8 billion in total sales. As of last year it employed about 9,800 employees across the country.
Aggressive vs. deliberate
According to Cabela’s last annual report published for shareholders, they have begun an “aggressive” approach to opening retail stores. Last year it opened four stores, and hope to open four more this year, with a total of 13 stores listed as opening soon. This would just about double their number of stores.
Most of the stores are in the Midwest and Texas, though they are spreading to both sides of the country with stores due to open in Hartford, Conn., and Reno, Nev.
For Donaldson, there is also a difference in the way L.L Bean opens stores. “We’re going about it very differently,” he said. “We’re entering markets very deliberately.”
Though L.L. Bean is also continuing to branch outside of its home state, they only plan to open two stores this year, one each in Massachusetts and Pennsylvania. For next year, they’ve announced plans to open additional stores in Massachusetts, Connecticut and New York. All of the new stores would be between 25,000 and 30,000 square feet, as opposed to new Cabela’s stores that are upwards of 100,000 square feet.
According to Donaldson, the smaller stores are meant to give people a “taste” of L.L. Bean and encourage them to order online or through the catalog.
Currently there are L.L. Bean stores in Virginia, Maryland, New Jersey and New Hampshire. In addition there are 14 outlets that range from Maine to Delaware and Virginia.
“We’ll continue to open more stores. It’s starting to ramp up,” said Donaldson.
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