Wayne Inouye, who brought Irvine-based Gateway Inc. to Orange County after emerging as the computer maker’s leader in 2004, resigned Thursday amid continuing troubles at the company.
Chairman Richard Snyder, a former Gateway president who took the chairman’s spot after the 2005 retirement of founder Ted Waitt, becomes interim chief executive.
Gateway plans to mount a search for Inouye’s replacement.
Inouye managed to end four years of losses by restoring Gateway to profitability last year through cost cutting. But that effort now has been eclipsed by growth concerns.
Gateway saw disappointing sales advances in the fourth quarter.
The computer maker posted fourth-quarter sales of $1.12 billion, up 9% from a year earlier but below Wall Street estimates of $1.22 billion.
Profits came in ahead of expectations and year-ago results at $22.4 million.
Direct sales to consumers, corporations, schools and government agencies dropped 39% in the quarter.
Inouye, a former Best Buy Co. executive, had pushed retail sales at Gateway. They were a bright spot in the fourth quarter, jumping 31% from a year earlier to $792 million.
The resignation “to pursue other interests” ends a stunning rise for Inouye.
Before joining Gateway in 2004, Inouye turned around Irvine discount PC maker eMachines Inc.
The revival caught the eye of Gateway, which bought eMachines for $266 million in early 2004.
By the time the eMachines buy closed, Inouye was running Gateway with his own hand-picked executive team, largely from eMachines. He took over from Gateway iconic founder Waitt.
Later in 2004, Inouye moved Gateway from the San Diego suburb of Poway to Irvine, bringing OC another Fortune 500 company.
Inouye stressed the eMachines model at Gateway: cheap production and piggybacking on big retailers.
Store closures, layoffs and production shifts brought down costs. Sales through big retailers boosted revenue and market share.
But now some question whether Inouye’s playbook has run its course.
Inouye plans to advise Snyder during a transition. Gateway plans to pay Inouye a year’s salary of $720,000 and a portion of any first quarter executive bonuses. Inouye and his family also get three years of company health insurance.
The executive can’t join a competing company for a year.
