Palm to shutter branded retail outlets in cost-cutting move

Palm Inc. will close all but one of its retail stores over the next five weeks, in keeping with its effort to cut costs and focus on its next-generation smartphone platform, according to the company.
Palm has eight branded stores in California and 26 “stores within a store” at major metropolitan airports around the country. It will maintain the Palm store within its own corporate headquarters in Sunnyvale, Calif.
The smartphone maker will continue to sell its handsets through carrier stores, resellers and other retail and online channels, including its own Web site. The closings are slated to be complete during Palm’s fiscal third quarter, which ends in late February.
“We continue to focus our company around core business initiatives and are consolidating more resources behind fewer programs in order to compete most effectively,” the company said in a statement.
The company did not post a press release about the move on its Web site, but made the information and statement available to the press upon request, perhaps a reflection that while it is taking cost-cutting steps it is not aggressively publicizing its shift in sales channels.
The move comes on the heels of an undisclosed number of job cuts at the roughly 1,200-person company in December and the cancellation of its Foleo product, a keyboard-and-monitor accessory, in September. The Treo maker also made a round of job cuts in June, shortly after attracting a $325 million infusion of private equity and raising an additional $400 million in new debt, while adding two former Apple Inc. executives to its board.
While many analysts believe Palm has a shrinking window of time to introduce a compelling new smartphone platform, analyst Tavis McCourt at Morgan Keegan said that the company is poised to show “substantial financial improvement” after the company’s current, fiscal quarter ends in February.