FOR IMMEDIATE RELEASE
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Duckwall-ALCO Stores, Inc. Announces
Corporate Initiatives for Fiscal 2006
Abilene, Kan. (March 1, 2005) - Duckwall-ALCO Stores, Inc. (Nasdaq: DUCK)
announces that at a special meeting held February 25, its Board of Directors
affirmed a number of initiatives presented at an earlier meeting held November
18, 2004. In addition, the Board of Directors approved additional initiatives
designed to substantially improve performance of the Company for its
shareholders.
Chairman of the Board Warren Gfeller stated, "We understand the need to
elevate the performance of all areas of our Company. Fiscal '05 was a
disappointing year and our fourth quarter is well below the same period last
year due in part to significant markdowns resulting from the planned cleanup of
Christmas seasonal inventories, a technology related write-down and the
continuation of high insurance and other costs. Our first and primary goal is to
continue initiatives begun in the fourth quarter of Fiscal '05 and to undertake
additional initiatives, which the board believes will result in improvement in
our Return on Shareholder Equity and which will position the Company for future
growth."
Gfeller outlined the company's key Fiscal 2006 initiatives:
[] Perform a comprehensive review of individual store performance to
determine best use of the company's invested capital. Those stores not
meeting minimum Return on Investment thresholds will be closed and
inventory will be liquidated or transferred to new or higher performing
stores.
[] Expand our efforts to reduce selling, general and administrative (SG&A)
expenses with specific emphasis on our costs of corporate overhead,
insurance, utilities, credit card fees, and distribution costs.
[] Undertake actions designed to improve same store sales with particular
emphasis on increasing store traffic, improving customer conversion and
higher average purchase dollars per transaction through:
o Conversion of selected stores to the Market Place concept, which will
carry an expanded line of consumables and fresh food products;
o Expansion of gift card program;
o Implementation of new point of sale system;
o Comprehensive review of store procedures, merchandising and marketing
efforts; and
o Further development and execution of an Internet sales strategy.
[] Cleanup seasonal inventory to make investment in inventory more
efficient and reduce carryover costs.
[] Review profitability of every product category to improve the company's
Return on Investment in inventory and to eliminate non-productive
categories.
[] Update the company's technology, which will create savings in overhead,
enhance store employee productivity, provide better control of shrink,
improve product selection and placement, maximize inventory turn and
enhance customer benefits.
[] Review the company's capital structure for optimum use of shareholder
capital.
[] Align employee performance incentives with shareholder interests. |X|
[] Develop a five-year growth strategy.
Gfeller continued, "Management understands the need to be proactive and to
operate with a sense of urgency in order to accomplish our goals in the short
term and to create shareholder value. We understand that some of the actions
necessary to improve our performance have had and will have a negative impact on
earnings in the form of one-time costs and markdowns. However, these actions are
necessary to put Duckwall-ALCO in a position to perform at the level expected by
our shareholders and to put the Company in a strong position to resume a growth
strategy."
Duckwall-ALCO is continuing its search for a new Chief Executive Officer,
following the retirement of longtime CEO Glen Shank. "The search is moving along
nicely," Gfeller noted. "Our new CEO will certainly add fresh perspective and
detail to these initiatives, but he and the Duckwall-ALCO management team will
remain focused on the primary objective to improve Return on Assets and Return
on Equity, while putting plans in place for aggressive growth.
The Company expects to be in a position to announce its financial results
for Fiscal 2005 within the next four to six weeks following the timely
completion of review of its financial statements by its independent auditors.
Duckwall-ALCO Stores, Inc. is a leading regional retailer that specializes
in offering a wide variety of products at reasonable prices to the underserved
communities of America. Founded in 1901 by A.L. Duckwall as a general
merchandising operation in Abilene, Kan., Duckwall-ALCO is known for its
convenient locations and for its friendly, personal service. The company has 266
stores in 21 states across the central United States, operating under two names,
ALCO and Duckwall. ALCO discount stores offer a full line of merchandise, while
Duckwall variety stores serve smaller communities, offering a smaller selection.
This press release contains forward-looking statements, as referenced in
the Private Securities Litigation Reform Act of 1995 (the "Act"). Any
forward-looking statements are made by the Company in good faith, pursuant to
the safe-harbor provisions of the Act. These forward-looking statements reflect
management's current views and projections regarding economic conditions, retail
industry environments and Company performance. Factors, which could
significantly change results, include but are not limited to: sales performance,
expense levels, competitive activity, interest rates, changes in the Company's
financial condition and factors affecting the retail category in general.
Additional information regarding these and other factors may be included in the
Company's quarterly 10-Q filings and other public documents, copies of which are
available from the Company on request.
For more information, contact:
Dick Mansfield
Vice President/Finance, Treasurer and Chief Financial Officer
785-263-3350 ext. 286
email: dmansfield@duckwall.com
or
Debbie Hagen
Hagen and Partners
913-652-6547
email: dhagen@hagenandpartners.com