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Gateway shutting 27 stores, including its outlet in Orem

SAN DIEGO (AP) — Gateway Inc. shuttered 27 of its stores around the country this week as part of a broad strategy to improve the bottom line at the nation's fourth-largest computer maker, company officials said Thursday.

About 500 Gateway Country Store employees were notified Monday that the stores they worked in were closing immediately. They will be offered jobs elsewhere within the company, said Bart Brown, senior vice president of the company's consumer division.

"This is just part of our back-to-the-basics strategy," Brown said. "We determined we could maintain the same coverage with fewer stores."

Nine of the closing stores are in California, with all but one in the greater Los Angeles area. Three stores are in Virginia; two each in Florida, Illinois, New Jersey, New York and Texas; and one each in Georgia, Indiana, Oregon, Tennessee and Utah.

The Gateway store in Orem closed Monday. Utah's other Gateway location, in Murray, is doing well and will remain open, according to Greg Lund, a company spokesman.

The 299 remaining stores are a key part of the company's mission of "humanizing the digital revolution." Shoppers enter a welcoming environment decorated with the company's trademark cow spots where they can try out Gateway products. Free training clinics are offered to help users beef up their computer skills.

"It's all about customer satisfaction," Gateway spokesman Brad Williams said. "That's what built our company up more than any advertising campaign."

Brett Miller, an analyst with A.G. Edwards & Sons, remains a fan of the stores, but applauded the closures, saying the company had oversaturated large metropolitan areas.

"The store is a wonderful concept," he said, offering a unique relationship with the customer. "Every store I'm in — and I'm in quite a few — I'm seeing people who know the person behind the counter on a first-name basis," Miller said.

The closures come after Gateway's stock took a beating since July, falling more than 75 percent. While investors have been fleeing technology stocks, Gateway's shares fell harder than any of its larger rivals — Hewlett-Packard Co., Compaq Computer Corp. and Dell Computer Corp.

Investors felt the company lost its focus of delivering the best products at the lowest prices, Miller said.

"We've got a jittery market to begin with," he said. "Then you've got a company going through a formidable restructuring."