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Last Updated: Friday, 2 April, 2004, 06:03 GMT 07:03 UK
Jobs lost as Gateway shuts stores
Gateway factory
Gateway is looking for a more workable strategy
US computer maker Gateway is to shut all its 188 stores with the loss of 2,500 jobs as part of efforts to stem its financial losses.

The job cuts amount to nearly half the struggling PC maker's workforce.

Gateway's restructuring plans hinge on its purchase of rival US PC firm Emachines in January to boost its market share.

Emachines' boss Wayne Inouye became Gateway's chief executive and launched a review of retailing strategy.

The store closures will take place on 9 April.

Gateway said on Thursday it would give more details of its new retailing strategy on 29 April, alongside its financial results for the final quarter of 2003.

Necessary surgery

IT analysts praised the store closures as a necessary move.

"It is an absolute positive," said Fulcrum Global Partners analyst Robert Cihra. "As long as those stores were there it was going to be very difficult for them to become profitable."

Gateway has run up three years of losses as sales have lagged behind rivals Dell and Hewlett-Packard.

It bought Emachines for $235m (129m) in January.

It said on Thursday that it plans to move the company headquarters north from San Diego, California, to Orange County, near where Emachines is based.

Gateway has shifted towards using online and electronic retailers through deals with Radio Shack, Office Depot and CostCo Wholesale Corp, the Wall Street Journal reported.

But the centrepiece of its new marketing strategy is thought to be the strong links between Emachines and Best Buy Co, the biggest US electronics retailer. Mr Inouye once worked as a sales executive at Best Buy.

Gateway founder Ted Waitt, who set up the PC maker on a farm in Iowa in 1985, remains the firm's chairman.

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18 Mar 03  |  Business

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