Originally created 08/15/98

Gateway to open branch



Gateway Inc., the South Dakota computer company that ships its high-tech machines in cow-spotted boxes, plans to open a mail-order store in Augusta before the end of the year, a company spokesman said Friday.

The store location has not been disclosed.

A direct marketer of personal computers, Gateway has traditionally sold its computers through telephone and Internet orders. The company opened its first stores -- where customers can see the computers and place orders for them -- in late 1996.

"The stores let the customer touch and see the products -- test-drive them, if you will," company spokesman Greg Lund said. "It's more of a showroom."

Gateway, which was Gateway 2000 until the company changed the name in April, calls its mail-order outlets country stores. They feature the company's Midwestern farm motif -- blue silos, grain bins and tractor-shaped seats.

"You'll see a lot of cow spots in a store," Mr. Lund said.

Customers will be able to place orders from the store and the PCs will be mailed to customers' homes or businesses in 5 to 7 days, Mr. Lund said.

Typically, Gateway stores are about 8,000 square feet and located in suburban areas, Mr. Lund said. So far, the company has 63 stores in 22 states. This will be the third store in Georgia and the first outside the Atlanta area.

Gateway would not say where the store would be located, but some say it probably will be in west Augusta.

Commercial property appraiser Carlton McDonald said the Augusta Exchange shopping center or the Augusta West Plaza shopping center would be prime locations for a new store like Gateway's.

Keith Campbell, manager of CompUSA, said he had heard that Gateway planned to enter the Augusta market -- possibly in the same shopping center that he is in -- months ago.

"We knew they were coming before we opened our store," he said.

Augusta Exchange developer Jim Timberlake, however, declined to comment.

The potential competition does not frighten computer retailers. On the contrary, some say, they welcome the new store because it will generate more interest in computers.

CompUSA, which opened in June and has announced it plans to merge with Computer City, offers software and accessories, in addition to computer hardware. It also is one of the only national computer retail store that carries Apple computers.

"We will be competing with a company that does a small segment of our business," Mr. Campbell said. "We have been waiting for it to come."

CompUSA and Gateway have different marketing strategies.

CompUSA, which was founded in 1984 in Dallas, has more than 167 stores nationwide. It stocks an inventory of various computer makers, while Gateway sells exclusively Gateway products and does not carry any inventory, instead relying on a direct marketing strategy.

Gateway, founded in 1985, manufactures the computers it sells.

Computer City manger Eliot Harrison said he also welcomes the competition.

"The more competition the better," he said.

Mr. Harrison said believes that the computer industry is headed toward direct marketing of computers.

"It's a great concept," he said.

Gateway Inc. Facts:

Founded: 1985

Headquarters: North Sioux City, S.D.

Employs: 13,000

1997 revenue: $6.3 billion

Home page: www.gateway.com

Trademark: Black and white cow spots.

Stores: 63 in 22 states