Direct sales shut door on German retailer

Comtech, one of Germany's oldest and biggest computer store chains, will close its doors in August.

Mobilcom, the parent company of Comtech, said that it would close all 62 Comtech stores and lay off 325 employees by the end of August.

Revenue has declined in the past few years amid tough competition and the rise of direct PC sales, a comparatively new phenomenon in Europe. Dell CEO Michael Dell has said that expanding its market share in Germany is one of the PC maker's near-term goals. Comtech has an online store, but it is unclear whether that will close as well.

PC sales have also been on the wane in Europe. PC sales in Western Europe slid 10 percent in the first five months of the year, according to British research firm Context.

Mobilcom also said that it would close other underperforming divisions of the company to boost profitability.

Comtech was founded in 1985 and expanded rapidly in the early 1990s. In 1997, Comtech announced a major alliance with IBM to sell its Aptiva line of consumer PCs. In the same year, Comtech merged with computer seller Escom. In September 1999, Mobilcom bought Comtech.

ZDNet Germany's Martin Fiutak reported from Munich.