A Risky Detour For Dell

Dell Computer has promised for months to return to the hypergrowth of yore. But on July 11, the personal-computer company turned its back on the fastest-growing segment of the industry, cutting ties with five retail partners including CompUSA and Best Buy. With retail sales projected to contribute just 2% of its sales for the quarter ending July 31, the company decided to refocus on its vaunted direct-mail operation and other, less costly channels--such as marketing via computer networks. Analysts agree the move will bolster profits in the short term but question the long-term wisdom. By limiting its growth potential while Compaq, IBM, and others crank up volume, they say, Dell could lose market share.

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