For Sale Sign May Go Up On Duckwall-ALCO

Aug 20, 2004

By George Anderson

Strongbow Capital Ltd., the third largest shareholder in Duckwall-ALCO Stores, is running out of patience and it wants the company to improve its sales performance, cut costs and get a higher price for its shares. And it warns that it will go looking for a buyer for the company if things don’t get turned around soon.

Raymond French, chairman of Strongbow, wrote a letter filed with the U.S. Securities and Exchange Commission, “The more time that passes without the company taking appropriate action … the more likely we are to conclude that a sale of the company … would be in the best interest of shareholders.”

According to a Reuters report, Strongbow wants the retailer to hire a consultant to help jumpstart sales; aggressively cut costs; buy back shares or pay shareholders a dividend; split the roles of chairman and president; and improve shareholder communications and the release of financial information.

Duckwall has a conference call scheduled for Monday to discuss its latest results. The company had not issued a statement on Strongbow’s letter to the SEC and its demand for changes at the company as of press time.

Moderator’s Comment: Are the recommendations made by
Strongbow Capital likely to make a difference in Duckwall’s bottom line performance
or that of its stock value should the company follow them? Would the company
be better off pursuing a sale?

Duckwall-ALCO operates stores under the ALCO, ALCO Market
Store and Duckwall banners in 21 states across the central United States. Its
strategy has been to expand by targeting smaller markets not served by large
national and regional discount chains.

George Anderson – Moderator

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