Jim, Thread....
Office Max/Gateway is BIG!
dailynews.yahoo.com
Says OM will be Gateway exclusively!
Go AMD!
Wednesday February 23 04:30 PM EST
Gateway cuts exclusive OfficeMax deal
By Margaret Kane, ZDNet News
Traditional direct-PC seller will invest $50M in office chain, open stores-within-a-store.
Gateway Inc. will be the exclusive PC vendor at OfficeMax Inc. under a deal the companies signed Wednesday.
Gateway (NYSE: GTW - news) will invest $30 million in OfficeMax's (NYSE: OMX - news) real-world business and $20 million in OfficeMax.com. OfficeMax will also become the exclusive office supply store at Gateway.
Gateway will begin rolling out stores-within-a-store at OfficeMax locations in late March and expects to eventually have 1,000 stores operating.
Sole PC provider
At the same time, OfficeMax will begin phasing out its computer department, making Gateway the sole PC provider. Monitors, printers and other peripherals will be available through the Gateway.com site.
Gateway currently operates more than 240 of its Gateway Country stores.
OfficeMax CEO Michael Feuer said in a statement that the deal will allow the company to focus on more productive businesses.
"In order to create value for shareholders, we needed to change the way (we do business)," said Mike Weisbarth, OfficeMax vice president. "The computer segment (has) been losing money for the last several years. (This way we) still offer a strong computer brand but we're not necessarily in the business of losing money."
Gateway will be responsible for all sales through the stores and will essentially rent the space from OfficeMax. OfficeMax had carried PCs from Compaq Computer Corp. (NYSE: CPQ - news) and Hewlett-Packard Co. (NYSE: HWP - news), and had recently ended a store-with-a-store trial with IBM Corp. (NYSE: IBM - news).
The two companies will take the branding efforts a step further, putting a link to OfficeMax's online store on all small-business and consumer systems Gateway sells. OfficeMax will also get placements on Gateway's site and in its e-mail advertisements.
Akin to Compaq-Radio Shack deal
This is not the first exclusive deal between a PC company and a consumer electronics chain. Compaq has a similar deal with Tandy Corp.'s (NYSE: TAN - news) Radio Shack division.
In a separate announcement today, Gateway CFO Jeffrey Weitzen told analysts that the company expects to have revenue of $30 billion by 2004.
Speaking at the company's annual analysts meeting, he said Gateway plans to expand sales of non-PC products and services, and that those sales will account for 49 percent of the company's revenue by the end of the year. |
