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Gateway Drops Direct-Sales Operation

Irvine, Calif. — Long known for shipping PCs directly to its customers in white and black, cowhide-colored boxes that reflected the company’s roots in Iowa, Gateway today announced it is shifting entirely to an indirect-sales model.

The changeover will take place during this weekend, a company spokesperson said. There are layoffs associated with the move, but the company did not have a specific number at this time. However, a spokesperson said some of these cutbacks have been taking place ever since Acer acquired Gateway last year. No facilities will be closed.

Gateway is dramatically altering its long-time business model in order to better align itself with its new corporate parent, Acer Computers, the company said. This includes both its Web site and toll-free sales line.

“We believe that our retail and e-tail partners offer consumers the best, easiest and most effective way to purchase Gateway products,” said Mark Hill, Acer Group U.S. general manager.

The exact amount of business Gateway has done directly was not available.

Gateway was founded in 1985 by Ted Waitt and made a name for itself by custom building and directly shipping PCs to its customers. The company eventually began selling computers through retail, but it never before gave up on the direct model.

Gateway’s first foray into brick-and-mortar retail came in the late 1990s when the company opened its Gateway Country Stores, and it quickly expanded the chain to include several hundred stores. The chain tried several formats, including a short-lived attempt to become a major CE retailer, and then shuttered its doors in 2003. The company then started to explore using other retailers to sell its products.

The company now sells through several retailers including Best Buy, Circuit City, CompUSA, Costco, Wal-Mart and several online retailers.