Gateway plans to exit Europe, possibly Asia

PC seller Gateway is planning to withdraw from the European market and is weighing its options for its Asian business, the company confirmed Thursday.

Gateway expects its proposed retreat from the European market to be complete before the end of the year or in early 2002, a spokeswoman for Gateway in Dublin said. There are no confirmed details about Asia, she added.

Employees at Gateway's plant in Dublin and staff in the U.K., a total of 1085 people, were informed Wednesday. A 30-day consultation period has begun and it is expected that the employees will be put on notice on Sept. 10, the spokeswoman said.

Ireland and the U.K. are the center of Gateway's activities in Europe. The company also has some employees in France and already closed its office in Germany in July, dismissing 17 staff, according to the spokeswoman.

Gateway, the world's second largest direct seller of PCs after Dell Computer Corp., is looking at ways to continue servicing its existing customers in Europe. This could be done through a third party, or from the U.S., the spokeswoman said.

Gateway has already started consolidating its Asian business. The company closed its offices in Hong Kong and Malaysia and outsourced service, sales and marketing functions to partners in those countries. Some retail stores were also closed.

On July 19 Gateway reported a second quarter net loss of US$20.8 million on revenue of $1.5 billion. Sales at the U.S. consumer business reported a 36 percent decline in unit sales compared to last year's period. Sales in Asia also dropped 36 percent, while unit sales in Europe were down 46 percent. The company would have turned a profit in the second quarter excluding its international businesses, according to media reports.

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Joris Evers

Computerworld

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