Gateway is planning on closing some of its stores to cut costs and better compete with Dell:

Although the company did not give any more specifics on how it will cut costs, the hope is that Gateway will shut down some of its 270 Gateway stores -- the biggest contributor to overall losses.

"Part of their strategy has to involve closure of some of those stores," said Robert Cihra, an analyst with Fulcrum Global Partners, a firm that does no investment banking...

If Gateway does decide to close some stores and emulate the Dell model of selling PCs over the phone and Web than the company can avoid burning through its cash, he said.

Gateway's stores offer no real advantage over shopping for a computer over the Internet. Sure, they look nice, but once inside I find the layout confusing. If I have a specific type of computer in mind, say a laptop vs. a multimedia desktop, the stores (at least the ones I've been to) are not layed ut in such a way that I can quickly find those types of computers. Buying a computer is all about information; as a consumer I want to quickly compare metrics such as processor speed, RAM, hard drive capacity and, of course, price. But this information is hard to find in a Gateway store (unless you are interested in reading fine print).

Recently when I was at a Gateway store I was looking for a very specific kind of laptop and had trouble finding it. When I asked a salesman for help, he was not very helpful. When I pressed him further, he made me wait while he logged on to the Gateway site and downloaded information. I could have done that at home, and faster. So there is really no advantage to shopping at a Gateway store right now.

Which is a real shame, from Gateway's point of view. The company is paying rent to have these stores in nice locations, not to mention utility bills, the cost of displaying the inventory, salaries for everyone in the store, etc. -- all so that a bored and unmotivated salesman can surf the web for me to give me information I am looking for.

So what is Gateway's solution? Be like Dell. Only they can never hope to be as efficient as Dell. Imitating Dell's strategy is a recipe for disaster. It doesn't have to be this way. Stores offer advantages web sites will never have. From the moment I walk into a Gateway store I should be met by someone enthusiastic who will learn what my needs are and sit me down in front of the computer I am looking for and let me play music, download a video clip, play a video game, touch up digital photos -- or do whatever it is that will excite me and really feel the product.