Friday, April 2, 2004
Gateway Closing Retail Stores
Posted by Kent Pribbernow in "NEWS" @ 06:00 AM
Gateway has announced plans to close its remaining retail outlets, which will result in the subsequent layoff of over 2,500 employees. The closings will begin as early as next week.
"Gateway announced late Thursday that it will close its retail stores next week and lay off about 2,500 employees associated with the shops, or nearly 40 percent of its work force.
The company, based in Poway, Calif., will continue its direct-sales strategy but plans to shut its 188 stores on April 9. Gateway recently acquired eMachines, and following the closing of the stores, the combined company plans to lay off 2,500--38 percent--of its 6,500 employees. Employees will receive severance packages. The company said it will provide more details about the impact of the closings on its revenue and costs when it announces its first-quarter results April 29."
Sad but not surprising. Gateway's Country Store concept never took off, and proved to be a financial burden on the company. I believe this was due largely to the fact nothing distinguishes Gateway as a brand name. They are, essentially, just another box maker. Over the past two years, the PC vendor has made attempts to extend into the other markets such as digital audio and PVR devices, so far with limited success. In contrast, Apple's retail strategy has proven to be quite popular, although it still has not reached profitibility. Personally, I don't believe Gateway will survive in the in the long term. :?
"Gateway announced late Thursday that it will close its retail stores next week and lay off about 2,500 employees associated with the shops, or nearly 40 percent of its work force.
The company, based in Poway, Calif., will continue its direct-sales strategy but plans to shut its 188 stores on April 9. Gateway recently acquired eMachines, and following the closing of the stores, the combined company plans to lay off 2,500--38 percent--of its 6,500 employees. Employees will receive severance packages. The company said it will provide more details about the impact of the closings on its revenue and costs when it announces its first-quarter results April 29."
Sad but not surprising. Gateway's Country Store concept never took off, and proved to be a financial burden on the company. I believe this was due largely to the fact nothing distinguishes Gateway as a brand name. They are, essentially, just another box maker. Over the past two years, the PC vendor has made attempts to extend into the other markets such as digital audio and PVR devices, so far with limited success. In contrast, Apple's retail strategy has proven to be quite popular, although it still has not reached profitibility. Personally, I don't believe Gateway will survive in the in the long term. :?
