Forbes Magazine and a number of other outlets reported that Gateway will shutter all of its Gateway Stores and layoff at least 2,500 sales people that it employs at these locations.
A lot of people have looked at Gateway Stores and wondered why they lasted so long. “Big Box” electronics retailers have been less willing to sell Gateway products because the company has stores that are considered competitive.
Last week, Forbes published an interview with Lap Shun “John” Hui, the entrepreneur that sold Emachines to Gateway earlier in March. In the interview, Hui stated that he considered buying Gateway as early as July 2002 with the intention of taking it private. The article quotes Diana Maranon, an investment banker at Averil Capital as saying, “Under the plan to go private, we never got down to this level of specific plans, clearly… {John Hui} would have been a proponent for closing the stores.”
Gateway Stores are undoubtedly a huge drain on the company. For a number of reasons they have not enabled Gateway to do what Apple Computer has done so successfully with its stores: control the presentation of its product line and successfully sell Apple customers more of its products than they might otherwise have bought.
Operation Gadget readers ought to be sad to see Gateway Stores go. We have a tendency to shop for electronic products with very specific features, and not simply buy the least expensive product in the category. We benefit from the existence of smaller retail stores where products can be closely examined, compared to each other, and seen assembled with other products into complete systems. This is not one of Best Buy or Circuit City‘s strengths.