View Full Version : Gateway closes its doors

02-04-04, 17:30
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 per cent of its work force.

The company will continue its direct-sales strategy but plans to shut its 188 stores on 9 April. Gateway recently acquired eMachines, and following the closing of the stores, the combined company plans to lay off 2,500 - 38 per cent - 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 29 April.

The store closings were not unexpected. Analysts, who had been theorising that the retail outlets were on the chopping block for weeks, said the stores could have been a liability for Gateway's efforts to form relationships with third-party retailers, which could carry Gateway-brand PCs and consumer electronics gear.

"Speculation has been swirling around the closings, and looking at the revenue and number of employees at each company, it was clear what they had to do," said Sam Bhavnani, a senior analyst at research firm Current Analysis.

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