Gateway Unveils Overhaul Plans

By Doug Olenick -- TWICE, 5/9/2003

La Jolla, Calif. - Gateway fleshed out plans to revamp its retail operation and product mix with new Gateway branded CE products and a new store format that are expected to result in almost half the company's sales being generated by non-PC products by 2005.

The struggling company also plans to launch a redesigned notebook computer line up and add additional mobile computing devices. All the products are expected to be out by the end of the year.

Five new pilot Gateway Country Stores will open by the third quarter and all the remaining 200 stores will be reconfigured to support Gateway's new CE-focused strategy by the fourth quarter of the year.

In March when Gateway closed 76 locations and cut 1,900 positions the company announced its intention to totally remake itself in order to regain profitability.

Further details on the new products and the stores upgrade are not yet available.

When completed these changes will greatly alter Gateway's financial base. Non-PC revenue will comprise 25 percent of all sales in 2003. This will increase to 23 percent in 2004 and 40 percent in 2005, the company said at an analyst meeting on May 8.

A positive cash flow and the compiling of a $1billion cash nest egg by the end of 2003 is the expected result of these changes, the company said.

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