Dell Closes Kiosks

Marking the end of a forgettable chapter in its history, Dell(DELL Quote - Cramer on DELL - Stock Picks) is shuttering its network of sales booths in the U.S. as it shifts its focus to selling PCs through traditional retail outlets.

The Round Rock, Texas, PC maker said Wednesday that it was closing the 140 kiosks that showcase Dell notebook and desktop PCs in shopping malls throughout the U.S.

The kiosks, which debuted in 2002, gave Dell some exposure to retail. However they were deemed less-than-ideal shopping experiences because customers placed orders for future home delivery instead of being able to carry home a new PC.

In recent months, Dell has adopted a more traditional retail strategy, selling its PCs through outlets such as Wal-Mart(WMT Quote - Cramer on WMT - Stock Picks), Staples(SPLS Quote - Cramer on SPLS - Stock Picks) and Best Buy(BBY Quote - Cramer on BBY - Stock Picks).

Dell said it was not shutting down its Dell Direct store in Dallas, which like the kiosks does not carry any inventory, and noted that the roughly 50 kiosks in overseas markets would also continue operating.

Dell said the move fits in with how the company's global retail strategy is evolving.

"Ever since we began our journey into retail, we wanted to give customers the opportunity to call, click, or visit Dell and have access to our award-winning products," said Tony Weiss, VP of Dell's global consumer business, in a statement.

Long known for its direct sales model, Dell traditionally eschewed retailers and sold its products strictly through phone orders and the Internet.

While the model served Dell well for years, it began showing signs of strain in recent years. As the PC market's growth shifted to notebooks, the ability to touch and feel a product before buying has become more important than was the case with desktop PCs.

Dell lost its spot as the world's No.1 PC maker to Hewlett-Packard(HPQ Quote - Cramer on HPQ - Stock Picks) in 2006, and has seen its sales slow.

Since founder Michael Dell returned to the CEO post last year, the company has struck a number of partnerships to sell its products through retail outlets. The company says its products are now available in more than 10,000 retail outlets worldwide.

As a result of the partnerships, Dell spokesperson David Frink said the kiosks were redundant. Frink said Dell does not break-out any information about the kiosks sales, and declined to characterize their performance compared with Dell's sales through its new retail partners.

According to industry research firm Gartner, Dell grew its PC shipment 17.1% in the fourth quarter of 2007, and saw its first increase in market share in several quarters.

Dell shares were down 15 cents at $20.41 in midday trading Wednesday.