Somewhere A Cow Is a Weeping...
April 1, 2004 6:21 PM   Subscribe

From the Sign Of The Times Department: Gateway closes all of it's Country Stores, which once numbered over 300. 2,500 workers laid off.(Full disclosure: I worked at 3 different Country Store locations over the years, two of which closed down prior to this mass closing). It's hard to believe that it wasn't that long ago that they seemed like money factories. The boom is now not just dead, it's decaying and rotting. What a strange trip it was.
posted by jonmc (27 comments total)
I blame you, jon.
posted by ColdChef at 6:31 PM on April 1, 2004

*drops to knees*

I'm sorry

Seriously, dude, you have no idea how strange it feels, to know that a huge entity that you worked for (on and off) four years no longer exists. There were 300 stores. It's like all the Radio Shacks are gone or something.
posted by jonmc at 6:35 PM on April 1, 2004

Now if we could just do the same with Crabtree & Evelyn.....
posted by BitterOldPunk at 6:42 PM on April 1, 2004

awful (and i'm glad you got something better, jon--can you bring any of your old co-workers in?)
posted by amberglow at 6:47 PM on April 1, 2004

It is strange news indeed, being a former Gateway employee as well. I actually worked with jonmc for a few months before I got laid off, ah good times. I've yet to hear from my neighbor who still works for a Country store in New York, so I'm only wondering how he feels.

Unfortunately this news doesn't come out of the blue Anyone who worked for Gateway would tell you that once they went into Officemax stores and acquired e-machines, it was going to end them. At that point they spread too thin and cut the quality control department in half. Then followed numerous bad desicions, from large corporate moves all the way down to closing the only Country Store in the District that made budget for the year.

What I find the most upsetting about it is that the Country store I worked in was the most comfortable place I've ever worked. Being in the service center there was a rush to it all, but it was still comfortable. I never felt like I was being abused as an employee at all, which is all too common at other places.
posted by JakeEXTREME at 6:52 PM on April 1, 2004

You know, the retail thing never made much sense to just seemed like extra overhead at a time when they were trying to match price point with companies that didn't have store front costs. I guess I didn't understand why they didn't choose to ink a deal with an existing retailer rather than trying to crack the market solo. (But I say this as a distant observer, not one that really paid much attention, other than to go "huh, weird", when I initially read about the opening of retail stores in the financial pages. )

That being said, it sucks muchly that that many people are losing their jobs. It's also likely to have a big effect on the areas where the stores were. Stores like that tend to be the anchor in strip malls or block developments. When they go empty, the blackout is felt by all the other retailers that are near the empty storefront, as well as those businesses that depended on the employees of the store. (Sandwich shops, coffee shops, etc..)

A rather spooky harbinger of the economy...and one that's hard to ignore.
posted by dejah420 at 6:58 PM on April 1, 2004

I had been sort of expecting it for a while as well, but it's still sort of stunning, this may be one of they biggest rise-and-fall stories of the whole tech boom.

BTW, Jake, a customer called, do we sell Imacs? [/inside joke]
posted by jonmc at 7:00 PM on April 1, 2004

See, I always thought the Gateway store thing was kinda weird. I think, in the end, the commoditization of computers is going to mean that the retailers that make it will either be like Dell, who is able to keep almost zero inventory, because they build to order, and only maintain a factory and a website, or like Apple, who sell at a high margin because they're selling an image as much as a product.
posted by bshort at 7:04 PM on April 1, 2004

Mass layoffs, month-by-month (from 2002 up thru this Feb), from the Bureau of Labor Statistics.
posted by amberglow at 7:06 PM on April 1, 2004

Also, what dejah420 said.
posted by bshort at 7:06 PM on April 1, 2004

I'm not sure that I grasp the importance of this. I had assumed that Gateway's initial success was due to their pricing and "mail-order" business model. Isn't getting out of the retail biz a necessary if painful step in returning the company to what it does best: selling computer hardware over the Web?

Dammit. On preview: what dejah420 just said.
posted by BitterOldPunk at 7:12 PM on April 1, 2004

I think this is just another sign that the consumer computer market is more and more becoming a service-oriented industry instead of merchandise-pushed. Which is a good thing, because that's how the open-source business model works, and we all want those guys to come in and make a bigger splash than they already are.
posted by angry modem at 7:19 PM on April 1, 2004

Yeah, I'm sorry to see all the layoffs of course but the company has been on a downhill slide for 12 straight quarters! This is viewed as a good and necessary move. Inouye is right to cut the stores.

I don't see this as any kind of new harbinger. Competitors, like Dell, are profitable. Gateway had 25,000 employees just in the year 2000; Now they have 6500. If they didnt start turning around somehow the whole company was likely to disappear!

Also, what others have said :)
posted by vacapinta at 7:19 PM on April 1, 2004

I agree with the posters who see this as a neccessary move, but believe it or not, back when I started in 1999, working in a Country Store was like a liscence to print money. People couldn't buy 'em fast enough. The physical store presence actually helped, because there were still alot of first-time buyers who needed to be gently guided through the door into the new era. That part of the job was actually my favorite part. In a way by getting so many people comfortable with technology, Gateway helped make it's own stores obsolete.
posted by jonmc at 7:25 PM on April 1, 2004

I can't take it anymore!
its: possessive indefinite pronoun
it's: it is
posted by lometogo at 7:49 PM on April 1, 2004

jonmc... that's not a joke, people actually asked that. And don't forget the million people that ask about the cup holder, or couldn't figure out how to plug in the power cord.

As for the Country Stores, they were always a great tool for selling machines. They were just handled poorly in the end. If I recall, at their peak(which was right around when I joined them) they made up about 50% of their system sales and about 75% of add-on sales. The add-ons are where the money is at. A huge point in any review I read was how you could rely on a local service center compared to shipping the machine out. That's where the Country Stores made the money back, the long term customer.

The stores were SO successful that Dell at one point tried to do it, but failed, horribly. The downfall of the company wasn't the Stores, it was Weitsen(sp?) an his grow-and-fast attitude. I say 'was' because it's pretty much going to take a miracle to save them now. My theory is that they're trimming the fat and getting ready to sell in the future.
posted by JakeEXTREME at 8:13 PM on April 1, 2004

The ice cream shop I used to work at closed too.
posted by toothless joe at 8:43 PM on April 1, 2004

The boom is now not just dead, it's decaying and rotting.

I'm not convinced that your conclusion follows from your premise. I suspect (with no hard data to back me up, I admit) that overall retail sales (as opposed to corporate sales) of PCs has been increasing steadily in the last few years.
posted by stavrosthewonderchicken at 9:16 PM on April 1, 2004

Hold on, naysayers -- it's not like Gateway itself is out of business, is it? Gateway still exists - just in a slimmer, trimmer form.

And call me crazy -- but I have always enjoyed the Ted & Cow commercials. Pure whimsy.
posted by davidmsc at 9:21 PM on April 1, 2004

I am of course very sorry to hear about those of you who are losing jobs.

However, I'd like to point out that just because the stores were bringing in lots of money (revenues) does not mean they made money (profits).

But on the bright side, now all the unemployed former Gateway salesfolk are free to innovate and create the jobs of tommorow!

(/me ducks)
posted by ilsa at 9:29 PM on April 1, 2004

or like Apple, who sell at a high margin because they're selling an image as much as a product.

and / or simply a unique and better product, worth the price. Probably a bit of both, but certainly not simply the former.
posted by Space Coyote at 10:02 PM on April 1, 2004

Competitors, like Dell, are profitable.

Because Dell is the Walmart of those competitors.
posted by nyoki at 11:58 PM on April 1, 2004

Thought I read yesterday this was a hoax link. Now to go look for the source.
posted by thomcatspike at 8:42 AM on April 2, 2004

Serching the web, there are many articles dated 4/2/04. Guess I was April's fool by truth,:P
posted by thomcatspike at 9:04 AM on April 2, 2004

At the same time that Gateway is closing up all their retail stores, Apple is opening up stores that have up to 5,000 people waiting in line the first day. The contrast is pretty stark. (Granted, that's Tokyo, but you have similar lines in the US.)
posted by laz-e-boy at 9:50 AM on April 2, 2004

For future reference, opening a chain of retail stores to push your inferior product is not the way to kick the ass of your mail order competitor. If Dell is in fact the Wal-Mart of computer retailers, then Gateway had that same opportunity to at least become a K-Mart or a Jamesway.

Some smaller retailers crushed by megastores have sucessfully made the transition to mailorder in order to cut overhead and survive. Gateway having expanded its Country Store offering was like the local low-end clothing store raising prices so that it could open a location at every corner when the Wal-Mart came into town.
posted by VulcanMike at 11:40 AM on April 2, 2004

If Dell is in fact the Wal-Mart of computer retailers,...

Just a note to say that comparing Dell to Walmart is like comparing apples to oranges. Dell has nowhere near the market cap, market share, distribution channel, P&E, profitability...nothing anywhere near the giant blue evil. (Not picking on you VulcanMike, just borrowing your phrasing. :)

Dell had a brilliant strategy a few years ago...but they got sucked into a bad, bad mindset that they were "l33t" and could do anything they wanted. Hence, the one thing that distinguished them from other box builders, the amazing customer service, was destroyed in the name of bigger profits and higher bonuses for executives.

Back in the day, when I bought Dell stock, they were a good value. Now, I wouldn't recommend Dell to anyone. They're seriously top-heavy, they've lost their way in the market, they've lost all the customer good-will they used to have, the boxes are crap now, and trying to get support is like standing on a mountain and screaming at people on the beach.

Dell, without a huge shakeup in management, marketing and production will be the next company to suffer serious fallout from the overwhelming evidence that the computer buying jag has peaked and found a level. The only brokers that recommend buying Dell at it's currently value are those brokers that have zillions of dollars they're trying to recoup from the tons of worthless paper they hold.

Xybernaut is a better value...and I think xybernaut is ripe for takeover. (Actually, someone with existing market presence could make a fortune marketing xybernaut correctly.) I'm just saying...Walmart may be evil, but they know how to run a business. Dell, not so much anymore. If Gateway returns to it's core business model, and focuses on that...they will kick Dell's ass in the marketplace. If I were a betting woman, looking at things like market caps, I would venture to say that Gateway's stock will seriously outperform (per share ratio) Dell's stock after the stores close and they get back to core business.
posted by dejah420 at 12:54 PM on April 2, 2004

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