retailing

Dell, which began selling in retail stores in late 2007, continues to expand the number of stores carrying its products. It has more than 28,000 locations, company officials said.

It will probably take a while for Dell to establish itself in stores and for retail sales to approach online sales, said Roger Kay, president of Endpoint Technologies Inc.

“It may take them years to turn [retail stores] into something that works for them,” he said. “They’ll struggle at it until they prevail.”

Dell is scheduled to report its first quarter earnings May 28. Its profits declined 48 percent during the last quarter. During fiscal 2009, which ended Jan. 30, the company posted $2.47 billion in net income on $61.1 billion in revenue.

Dell’s U.S. revenue declined 3 percent, while international revenue increased 4 percent during fiscal 2009. The company attributes the domestic decline to its commercial business combined with the global recession during the second half of the year, according to a company filing with the U.S. Securities and Exchange Commission.

With help from retail store sales, the company’s consumer revenue increased 5 percent during fiscal 2009 compared with fiscal 2008, the filing shows.

Dell is continuing its online ways.

Company officials have said they want to increase profits by expanding beyond hardware sales. Dell is also selling management tools, services and software, and the Web is a highly profitable way of doing that.

For example, in January, the company launched the Dell Download Store, a Web site designed for customers to download software from 12 publishers, such as Intuit Inc. and McAfee Inc. The e-commerce site is expected to eventually include music, movies and games.

The 2008 numbers highlight the importance that online business will continue to play at Dell, said Rob Enderle, principal analyst for the California-based Enderle Group.

“At the end of the day,” he said, Dell “will always be better online.”

Top 10 U.S. online retailers

2008
1. Amazon.com Inc. — $19.2 billion
2. Staples Inc. — $7.7 billion
3. Dell Inc. — $4.8 billion
3. Office Depot Inc. — $4.8 billion
5. Apple Inc. — $3.6 billion
6. OfficeMax Inc. — $3.1 billion
7. Sears Holding Corp. — $2.7 billion
8. CDW Corp. — $2.6 billion
9. Newegg.com — $2.1 billion
10. Best Buy — $2 billion

2007
1. Amazon.com Inc. — $14.8 billion
2. Staples Inc. — $5.6 billion
3. Office Depot Inc. — $4.9 billion
4. Dell Inc. — $4.2 billion
5. HP Home & Home Office Store (Hewlett-Packard Co.) — $3.4 billion
6. OfficeMax Inc. — $3.2 billion
7. Apple Inc. — $2.7 billion
8. Sears Holding Corp. — $2.6 billion
9. CDW Corp. — $2.4 billion
10. Newegg.com — $1.9 billion

SOURCE: Internet Retailer