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Gateway To Close All Retail Stores
John Lazzaro writes "Looks like Gateway is throwing in the towel and closing all of its remaining retail stores, according to a Reuters/Yahoo! report." The story notes: "Gateway's stores, which will be closed on April 9, have long been criticized by analysts and investors as an expensive drag on cash flow because of lease costs and the difficulty of managing inventories", and goes on to suggest: "...with [the acquisition of] eMachines, Gateway doesn't necessarily need the added distribution channel the stores gave the company. In addition to selling Gateway's wares over the phone and via the Internet, eMachines PCs are sold at major retailers such as Best Buy."
Who needs April Fools when you've got capitalism?
Tee hee!
First funny story all day, because it's true!
They need the resources to open stores in India. All the people they're paying to do tech support need somewhere to buy computers.
April Fools! Ha ha ha! ...eliminate about 2,500 retail jobs...
Oh.
Back to the barn. Moo
Opera Watch - An Opera browser blog.
If their decision to fire me last month had anything to do with this...
The Gateway Store was mainly a "showroom" environment because Gateway's main product is a made-to-order PC. Gateway could never get into a Best Buy or Circuit City environment because they didn't want to cheapen their customizable image by providing computers that would sit on shelves. Meanwhile, eMachines is the sit-on-the-shelf cheap PC that you can find at Best Buy and Circuit City along with discount environments such as Wal-Mart.
Shutting down the stores is more or less a nod to the retail chains that they can have eMachines all to themselves, and there's no danger of having to compete with eMachines coming out of a Gateway Country store. Even if those eMachines PCs had a "Gateway" sticker on them, it'd still be just as bad to the retailers... they don't like suppliers who are trying to undercut them by operating their own retail stores.
This is one of the forces that limits Apple's distribution. Apple choses to sell mostly directly and therefore they aren't making much of a push to get themselves into major retail chains... Since Wal-Mart can't undercut Apple's prices, Wal-Mart's not particularly interested in having Apple.
So, there's a nice firm wall going up at Gateway. Made-to-order PCs will be ordered by phone or Internet and be stamped Gateway, mass-made machines will be in retail stores and called eMachines. Everybody should be happy...
Although Apple seems to be doing quite well in retail, Gateway was losing money hand-over fist. (Gee, think that could have anything to do with quality?)
My prediction: Either they merge with another company or they'll be out of business within two years.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
When I asked them about Linux, or a machine without an O/S, I was told "Microsoft won't let us do that." Double Duh.
In short, it was about the most useless showroom experience I've had in a long time. Gateway will lose nothing by shutting these turkeys (cows?) down.
Indeed, otherwise such stories - if false - might negetively affect Gateway's stock. Yahoo might be in for some A/F humour, but wouldn't chance a story of this type because of the possible legal repercussions.
What exactly could those stores accomplish that could not be done with a kiosk in a shopping mall (kind of like their biggest competitor)? Like the article said, they were simply a money drain and keeping inventory in the store kind of defeats the purpose of the build to order model. Now if only Dell would get out of the super-saturated consumer electronics market and we just might see Dell and Gateway going back to competing to build the best computers (wishful thinking, I know).
This is understandable, i suppose, as you can keep more profit without the overhead associated with brick n' mortar stores, but still, the stores had a use.
I remember trying to help my dad buy his next computer, and it really helped for me to be able to take him to the store and for him to physically see the computer he was going to buy. While large computer outfits can do this too, it was better, conceptually, for him to go to a store that only had one brand of computer, and they weren't all in the back next to shelves of accessories and idiot salesmen (like at CompUSA or Fry's.)
Especially for the over 45 crowd, adoption of internet-based sales can be a little discomforting. While i haven't a problem with it, Gateway's target audience just might.
filter: +3. Hey, look! all the trolls went away!
I imagine that part of the choice to close retail shops is the simple fact that you have to pay tax in states that you have a retail presence in. On a $400 pc, this could be easily $40.00 in taxes even if you mail order it. If you buy it local, that's great, but if you buy it via mail order, you get stuck with shipping and tax. This can really add up for those who buy their more premium solutions via mail order.
There is no sanctuary. There is no sanctuary. SHUT UP! There is no shut up. There is no shut up.
I had a client who would not switch to Dell or anyone else becuase there was a Gateway store near his house. I have HATED Gateway for years because of several bad experiences with them. Even after relating these to him, he would not switch his company to Dell because of that store. Well, I guess he just lost his reason.
Great ideas often receive violent opposition from mediocre minds. - Albert Einstein
Seriously, I used to check my email at Gateway stores all the time. Now it's going to be hard to find a place. Try checking your email at a Radio Shack to see what I mean. They freak the moment you navigate off the Radio Shack website, screaming that they "hear about it" from the main office whenever this happens.
The flag just makes more sense than the constitution. - Judas Gutenberg
The closing isn't surprising at all. To sell at a store like this, you need to have a more attractive product. Gateway had the Profile, which was not a good product. It saved space, but it performed poorly, and was not designed to be easily maintained. It was similar to the iPaq in these respects, and neither succeeded. They failed to attract certain market segments that made the iMac popular, namely education.
Besides that, all they had were a bunch of run-of-the mill computers. Their company really did not have much vision. And when they made an interesting move (acquiring Amiga or saying that DRM is bad), they didn't follow through with it.
The future of Gateway looks pretty bleak. I think in this move they are probably looking to be acquired. They have never really got it. Trying to show vision, and then turning their back on that vision. Poor service, trying to undersell, not finding a customer base.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
People getting fired in an already bad economy isn't funny
i just called gateway store in Corona, CA.
Talked to some guy, and he said yea, theyre closing. Should have a big sale, but doesnt know when.
I'm gonna call back saturday and see..
hope i can score some cheap shit!
-Grump
Is it true that more people vote for the winner of American Idol, than vote for the president? -Ali G.
Dell has a number of mall kiosks, at least around here in Ohio. They have more a seasonal focus tho. If you want to order anything, you use the PC on display to go to the website. One or two people sit there and answer the typical first PC buyer questions.
You can't really compare Dell to Gateway. Dell has a very different image, expecially in the business market. Gateway made a big push into the small business market, but much isn't heard about that anymore. If you don't have that big cash cow of business desktops and mid-range servers, don't have a great rep in the high-margin digital media and gamer marked, and can't bundle lots of services and financing, there aren't a lot of places left to carve out a niche without having to carve it out of a competitor. I think Emachines will become the new brand image, in stores like Best Buy and CompUSA, going after the lower end market under HP and Sony.
You have to wonder what is going to happen to the Gateway plasma TVs. That was really the only reason to go to a Gateway store (they have no real brand image or must-have products like Apple, or the fans either). If they could get those in stores and use it as leverage in package with a gateway based DVR system, they may get some where.
I think you're confusing cause and effect here. Apple chose to go direct precisely because their forays into big box retail had been so unsuccessful. BestBuy, Circuit City, Computer City, Office Max, Sears - Apple has tried them all. In every case Apple's products were marginalized by big-box salespeople who didn't know the first thing about Apple technology and had no interest in learning about it.
Apple's retail presence is far greater now that they control presentation of their products. They've selected marquee locations and they showcase Apple products "in the wild" so customers can play with Macs, digital video cameras, add-on devices, and so on.
Wal-Mart was founded on deep price discounting. Volume of sales for already established commodity products is their bread and butter. Wal-Mart is, as you pointed out, not interested in getting into a business where they can't undercut the competition. Apple is likewise uninterested in making a deal with Wal-Mart, because they'd rapidly lose control over the value of the Apple brand.
Read the EFF's Fair Use FAQ
You know, I remember when the first Gateway store opened around here, and it was a big event! People flocked from miles around to gape at the amazingly fast new home computers running Windows 98. They even had a real cow outside of the store to comemorate it--no really! People thought Gateway was cool back then, but now...well, maybe it's for the best!
Gateway made a big push into the small business market, but much isn't heard about that anymore. If you don't have that big cash cow of business desktops and mid-range servers
There's a joke in here somewhere...
Javascript + Nintendo DSi = DSiCade
- "Oh, forget the cable, I was really looking for a laptop like that one, can I see? Oooh. Nice. Ah. Color? Neat. Hmmm. Say I could use something like that -- say how's the screen in bright light, I notice that it's rather dark in here."
What we had there was a failure to communicate.It's great -- how do you spell your mother's maiden name?
"Could we remove it from the shackle for a minute and take it near the window to get an idea?"
Sorry, we're not allowed to do that -- its against our security policy. Do you rent or own?
"No, no, I don't want to take it OUTSIDE, just over near the, er, tinted *sigh* window to get an idea how...
"Will you want a printer with your purchase?"
So, good bye Gateway Stores -- you sucked and we're better off without you.
-- @rjamestaylor on Ello
Let's not fool ourselves into thinking that Gateway knows things we don't about how to plug in a PCI card or install a HDD.
They failed to underestimate the "I want it now" of customers. If they want to wait, they will order online for a few dollars less.
It would have worked if they had put a single, well-trained tech in every store to "customize" your box (the computer you pervs), and boom, you're out the door with a custom Gateway PC in 15 minutes. If you want a burn-in, pick it up tommorrow.
Or is a factory-built PC somehow special (having been in a few assembly plants, don't count on better, necessarily.)
Faith is the very antithesis of reason, injudiciousness a critical component of spiritual devotion. Jon Krakauer
At what point do Gateway become Beleagured?
They've been described as being Troubled for a while and I was wondering if there's a scale of adjectives that journalists use to describe how deep in shit a company is.
If I remember rightly Apple went straight to Beleagured status almost overnight, and stayed that way for around five years!
Gateway was reselling CPU time on the PCs showroom PCs in all of their stores for companies to use as a private computing grid. So what happens to the grid? Do they just put all of the PCs that were in the stores in a warehouse and run the grid there? They just signed a new customer a few weeks ago.
Then you search for Dell and you get images back things like this. For some reason, I really want a Dell now.
I worked for a software company in California, and I was asked to purchase a PC for an emergency programming job. Our usual supplier took over a week to get a PC, and I remembered seeing the Gateway store on my way to work.
Thinking the Gateway might be a cut above the HP Pavilion or something I would get at Best Buy I drove over there. There were about 3 people looking at computers -- one was getting a demo of something by a sales person -- a pretty empty store.
It took me 3 minutes to walk around and peruse the various models, and then 10 more to get a sales rep to talk to me.
I pointed at a PC and told him I wanted to get one and asked for a price. When he told me it would take a week to get the PC, I was floored.
"You don't have any computers to sell here???"
"No."
"What's in all these cow-boxes you have along the windows?"
"They're empty."
"So what do you sell here?"
"Well, you can order one here. The store is so that customers can come in and try the machines out and match their needs to the PC."
"But I can order one from home with a couple of mouse-clicks!"
He didn't have much of an answer for that. I drove on to Best Buy and got the Pavilion.
I remember thinking that GW was crazy to open all these stores just so people could look and touch (but not take!) the machines. Expensive real-estate too -- all the stores I saw were in very high-rent areas.
Maybe Inouye can keep Waitt's expensive schemes in check and keep the company afloat....
I work tech support for Gateway. Trust me those computers are verified crap. They put the worst, cheapest parts in all of the systems I've seen.
My favorite is the guy who called up with a Gateway computer that had 768 MB Ram, a Radeon 9600, and RAID 0 in it. Which is all fine, except the power supply was 250 Watts!!! Needless to say this guy had tons of problems with his computer from day 1.
023AD01("Child", "Evil");