Compaq is hoping to boost sales by opening its own retail stores and has started testing the concept in Australia.
PC manufacturer Gateway pioneered the branded-store model in the US where it opened its "Country Stores" where customers could go and test drive PCs before hopefully buying a made-to-order system.
Now Compaq plans to duplicate the concept, but only in Australia for the time being. Compaq announced this week that it would open an unspecified number of stores there.
No-one at the company could be reached to comment on whether the concept will be duplicated in Europe, the US or elsewhere in the Asia Pacific region.
There were immediate repercussions from the retail channel in Australia. A major retailer, Harvey Norman, which claimed it did $97 million of business selling Compaq systems to the Soho market immediately dumped the brand.
Harvey Norman general manager for computers and communications, John Slack-Smith, told The Australian newspaper: "I don't understand how a retailer can have a business partner that is also a competitor. There's conflict."
Slack-Smith said the company was talking to both Hewlett-Packard and IBM to fill the void.
Ian Penman, Compaq's Australian managing director, said that retailers, other than Harvey Norman, had accepted the arrangement. Adding he was disappointed that the two sides could not come to an agreement Penman said: "We have had an excellent relationship with Harvey Norman and we are keen that the company will once again be a business partner.
"We admire the work that (chairman and founder) Gerry Harvey and his team have done in making brand-name computers and peripherals available to a wide audience at an affordable price."
"However I would like to highlight the fact that Compaq has strong relationships with many other successful retailers which excel in providing quality products and services to consumers across Australia," Penman said.
In Australia, Compaq had 1998 revenues of around US$1 billion.
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