PORTLAND -- L.L. Bean said Tuesday it will close its outlet store on Congress Street next year, which a Portland downtown official said would deal a blow to the city's retail sector.

Carolyn Beem, spokeswoman for the Freeport retailer, said the company told the store's 14 employees Monday the lease at the 542 Congress St. location would not be renewed, and the store would close in September.

The outlet, one of 15 operated by L.L. Bean, opened in 1996. It is the closest store to the company's Freeport flagship operations, which include full-priced and outlet locations.

The company's other Maine outlet stores are in Ellsworth and Bangor. Bean also operates 13 full-priced stores outside of Maine.

Beem said the company wants to concentrate its selling efforts at its new outlet location at Freeport Village Station, a 120,000-square foot outlet mall that opened earlier this year across the street from L.L. Bean's main retail store in Freeport.

"It no longer makes good business sense for us to renew the Portland lease and continue to operate two stores," she said.

Janis Beitzer, executive director of Portland's Downtown District, said the Portland store was a destination location and its closing will be a loss for the city's retail sector, which has seen an increase store closings and relocations during the economic recession.

"Obviously, losing the L.L. Bean name anywhere in the city of Portland is sad," she said.

Beitzer said when cruise ships dock in Portland a steady flow of passengers flocks the store, providing business for surrounding restaurants and shops.

"But we understand these are difficult times and like any other business, they need to make decisions," Beitzer said.

Beem said the company hopes to find other internal positions for the 14 Portland employees.

Bean has been increasing its retail presence in the past decade in an effort to become less dependent on seasonal and catalogue sales, and to increase brand awareness.

The company opened a store in Dedham, Mass. in July, but shelved plans for another seven. Next year it plans to open two more stores, in Malvern, Pa., and Rochester, N.Y. Bean saw revenues sink 7.8 percent to $1.5 billion for its last fiscal year.

It imposed a wage freeze, offered early retirement and eliminated 150 jobs in Maine due to slow sales.