Gateway retail store coming

by Karen E. Culp

SBJ Staff

Gateway Country, a wholly owned subsidiary of computer manufacturer Gateway, will open a retail store in Springfield at the end of November. The store will open at 2838 S. Glenstone, in a building most recently occupied by Tempo Fashions.

The new store will have no inventory, but customers will be able to walk in and order the computer they are looking for, said Greg Lund, manager of corporate communications for Gateway Country.

The company now has 101 stores in the United States, including two in the St. Louis area and two in the Kansas City area, Lund said. The first two Gateway Country stores opened in California in 1996.

Prior to getting into the retail business, Gateway, once called Gateway 2000, sold computers over the Internet and by telephone. That portion of the business began in 1985.

"We looked at our business and saw that we were doing well with our Internet sales and well with our phone sales, but we wanted to reach that portion of the public that is more comfortable purchasing something in a retail setting," Lund said.

The Springfield store should have a total of 15 employees, Lund said, and the company is in the process of selecting those employees now. The store will feature display computers that customers will be able to come in and sample, and will have specialized services, such as a small-business resource center and training courses on the Microsoft software the company also sells with its computers.

Though it does sell software, Lund said Gateway's focus is on hardware, and hardware sales make up the largest portion of its business.

"The concept behind the retail stores is that if a customer comes in and likes what they see, they can order the computer right there. We take a lot of information about the customer and try to help them come up with a system that is going to fit their needs," Lund said.

The stores are called Gateway Country because they have a "country-type feel," Lund said.

"The decor is very country-oriented. When you sit down to place an order, you sit on replicas of tractor seats. It's a very northern-plains farm look," Lund said.

Gateway has always been focused on customized systems, Lund said, and does not manufacture large quantities of its products prior to their purchase.

"We don't build 20,000 of each unit and have those sitting in a storeroom or warehouse waiting to move," Lund said.

Gateway and Dell got started about the same time, and both companies have focused on customization of computer systems, Lund said. For its entire 13 years, Gateway has been strictly a computer company, Lund said.

The company chose to open a retail store in Springfield because the city met many of its requirements.

Gateway is expanding its retail component rapidly, adding about 60 stores during 1998.

Though Lund said he cannot say what the projected number of stores to be opened in 1999 is, he thinks the trend of opening a large number of stores will continue.

Starting with two stores in 1996, Gateway was up to 40 stores by the end of 1997 and will have more than 100 at the end of 1998.

Springfield, though it is probably one of the smaller communities to have a Gateway store, was identified as a community that would support such a store, Lund said.

"We are looking for areas that are good marketing areas for us and that are in technologically rich areas, areas where people have a lot of need for our products. Springfield was identified as one of those communities," Lund said.

When you order a computer from Gateway, delivery time is typically five to seven days, Lund said.

The company has three factories in the United States, one in North Sioux City, S.D., where the company's headquarters is located; one in Salt Lake City, Utah; and one in Hampton, Va. The company also has a factory in Ireland and one in Malaysia.

Though the company's corporate office will help set up the Springfield store and train the employees, the local hires will largely run the store themselves after the initial training.

Gateway was founded in 1985 near Sioux City, Iowa, by Ted Waitt, who is now chief executive officer and chairman, and Mike Hammond, who is now senior vice president of manufacturing. The company moved its headquarters to North Souix City, S.D., in 1990. It went public in 1993 and is traded on the New York Stock Exchange under the symbol GTW. Gateway now has 16,000 employees worldwide and did $6.3 billion in business last year, Lund said.

In 1997, more than 30 percent of Gateway's total U.S. shipments went to business customers.

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