off the Press - News
April 3rd, 2004
Closes All Retail Stores and more.
In a week of sweeping
changes wrought by its recent acquisition of PC manufacturer eMachines,
Gateway Inc. has announced it is closing all of its troubled retail
stores and that its consumer marketing chief, T. Scott Edwards, will
leave the company.
The moves close 188 stores, slash 2,500 jobs -- 40% of the company's
workforce -- and give Mr. Edwards two to four weeks to wrap up his affairs
at Gateway, where he was executive vice president of the consumer. In
an interview with AdAge.com Mr. Edwards said he does not have a new
Interim marketing duties will be handled by Brad Shaw, senior vice president
of marketing, according to the company. "Brad will be assuming
the duties provisionally. It still hasn't been decided whether he will
retain that role or if we will recruit from the outside," a spokesman
Gateway, headquartered in a suburb of San Diego, acquired eMachines
Inc. of Irvine, Calif., in early March in a deal reported to be worth
$290 million. The CEO of eMachines, Wayne Inouye, was subsequently named
the new CEO of
a position formerly held by Gateway founder Ted Waitt. Seven members of
a newly formed 13-member executive team are former eMachines executives.
Mr. Edwards was one
of five top executive management team members listed by Gateway as it
entered into the merger; only Mr. Waitt and Chief Financial Officer Rod
Sherwood will remain, according to the company. Gateway will also move
its headquarters from San Diego to be closer to eMachine's home in Orange
Gateway sold 2 million PCs last year and lags behind dominant leaders
Hewlett-Packard and Dell, which each sold around 10 million machines.
Since November 2002, Gateway has tried to move beyond PC sales, broadening
its product line to include almost two dozen consumer electronic categories
such as TVs, digital cameras and DVD player/recorders.
The newly merged Gateway presents a unique marketing challenge. Gateway
built its reputation as the friendly, folksy PC maker selling direct to
consumers, while eMachines built its business by selling ultra-low-cost
PCs through major retailers.