Gateway in PC Deal With U.S. Military

Gateway Inc., the money-losing personal computer maker, will sell discounted personal computers to military personnel through base stores under an agreement with the U.S. Army and Air Force Exchange Service.

Stores on 52 bases in the U.S. will offer four Gateway models, including desktop systems and a notebook computer. Gateway Vice President Steve McAllister said the company wants to expand its PC offering to military personnel online and through base exchanges overseas.

Poway, Calif.-based Gateway is trying to boost sales and regain profitability after losses in eight of the last nine quarters. In May, Gateway said it would sell PCs at more than 900 RadioShack stores in Canada, after exiting that country two years ago. The company also has added non-computer products.

Gateway shares rose 18 cents to $4.36 on the New York Stock Exchange.

The Army and Air Force Exchange Service, a Defense Department agency created in 1896, sells discounted merchandise to U.S. troops and donates profit back to the military community. In the last decade, the exchange service donated $2.42 billion to the Army and Air Force for such projects as music programs, new libraries and sports facilities.