FREEPORT, ME: It is a good time to be a consumer with money to burn. One can buy goods in many different ways, depending on what is being sought and how much shopping time is available.

A relatively small percentage of retail sales take place through catalogs or the Internet. Most people still shop the old fashioned way -- they stop by a nearby store and poke around.

In addition to these competitive pressures, catalog industry experts say that they are always vulnerable to hikes in paper prices and mailing costs. In order to insure their long-term survival, a growing number of catalogers are diversifying the distribution and marketing channels they use to reach consumers.

With that in mind, L.L. Bean, a leading manufacturer and retailer of outdoor products, plans to extend its retail store presence in the United States for the first time.

"Our current philosophy is that we should be serving the customer how ever they want to be served," says Dick Leslie, director of retail planning and real estate at L.L. Bean. "If they prefer to shop with a catalog, we have that channel available. If they want to shop for our products in retail stores, then we should have stores."

L.L. Bean has set its sights on the Mid-Atlantic region of the U.S. for its initial retail stores. "One of our largest concentration of catalog subscribers outside of New England is in this region, so we wanted to serve that customer base in a retail format," explains Leslie. "Also, by being relatively close to Freeport, management of the stores and distribution of merchandise will be easier."

The first step in L.L. Bean's retail expansion will be a 75,000-square foot store at Tysons Corner Center in McLean, Virginia. Construction of the store is expected to begin this fall and be completed in July 2000.

Divaris Real Estate and its exclusive tenant representative, is helping L.L. Bean search for store locations in the Washington, D.C./Baltimore and New York City/New Jersey trade areas. Gerald Divaris, chairman/ceo of Divaris Real Estate, is working closely with L.L. Bean's executives as well as with the company's real estate consultant, Larry Plotkin of The Plotkin Company, and George Galloway of Next Realty. Their joint efforts have resulted in L.L. Bean signing its first lease in the Washington market for a "core" store.

"We were looking for a store site west of Washington, D.C. [because] Fairfax County is a very strong catalog subscriber base for us," notes Leslie. "In addition, there are a lot of people who aren't subscribers but are very similar in terms of their demographics. They tend to have a college education, earn a higher income, and do things outdoors."

Leslie has seen the catalog industry become more competitive during the 22 years he has worked at L.L. Bean. The industry has steadily increased its share of the total retail market, partly because of the advantages that catalogs have to offer. In addition, department stores have been getting into the business to exploit these advantages.

"The convenience of catalogs is still there; you don't have to drive in traffic or find a parking space," says Leslie. "Catalogs also offer a broader selection and more unique items than stores because the cost of handling these items tends to be less with catalog companies. They present so much information about so many goods that it would take a lot of driving and flying around to retail stores to match it."

Bricks-and-mortar stores have their advantages, as well. According to Leslie, stores benefit consumers because, "In the store, people can feel the fabric of clothing, see the real colors of products or try things out."

Additionally, according to an article in the Direct Marketing Association's March 1997 newsletter, more than 73 percent of catalogers planned to be online in 1997. Internet commerce is growing like wildfire, prompting catalog companies like Land's End, Plow & Hearth and many others to jump on the cyberspace bandwagon.

"Many (companies) only used catalogs 20 years ago, but now they are selling to consumers through retail stores and over the Internet as well," notes Leslie. "Today's smart retailer is participating in the catalog, Internet and store channels in order to be there whenever the customer wants to shop."

While marketing through the Internet saves printing and mailing costs, not every catalog company has a target market that can be reached with this channel right now. For example, a catalog that markets low-priced gadgets may have a tough time making Internet sales because most lower income people don't have Internet access and probably won't want it anytime soon.

Furthermore, Leslie believes that the jury is still out on how Internet sales will impact the rest of the retail industry. "I don't think anybody has the answer, but Internet commerce will affect how we run our business," he says.

That leaves the traditional retail store format as the primary means of diversification for catalogers. Many companies have gradually built chains of stores such as Talbots, Eddie Bauer, Williams-Sonoma and Victoria's Secret. For the most part, in Leslie's view, they have successfully made the transition to bricks-and-mortar retailing.

In some cases, however, catalogers have needed help. "It is true that a pure catalog company doesn't know a lot about opening retail stores and may have to hire professionals to support the expansion," notes Leslie.

Fortunately, L.L. Bean has had some experience in retailing. The company is one of the country's most well known catalogers, selling more than 16,000 products, ranging from apparel to fishing gear, through the mail for over 87 years. Yet it has operated a flagship store in its headquarters town of Freeport, Maine since 1917. The store started out as a small showroom and has blossomed into a 100,000 square foot paradise for lovers of nature and adventure.

Today, L.L. Bean operates nine factory outlets in Maine, New Hampshire, Delaware and Oregon. It also awarded a license to open full-price retail stores in Japan in 1992. Sixteen stores now operate in that region, with eight having opened in just the past year.

Their goal is to penetrate other markets in the same way that the Freeport flagship location has invaded New England, by opening stores that emulate some of the elements of the flagship store. One of these elements is the Outdoor Discovery School.

The program consists of clinics and field trips that encourage people to participate in outdoor activities. The benefit of such a program is obvious -- if more people go hiking and camping, more people will need L.L. Bean's products.

How will L.L. Bean's management know that its retail expansion is a success? "Our plan is to open two to three more pilot stores in the D.C. area and operate them for a while to make sure we understand the management of the stores," says Leslie. "Once we get our feet grounded, we will open other stores across the country."