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Duckwall-ALCO Takes Strategic Actions To Focus On ALCO Stores And Enhance Profitability

ABILENE, Kan., Nov. 29, 2010 (GLOBE NEWSWIRE) -- Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK) today announced strategic actions it believes will better allocate shareholders' capital and improve profitability. The Company will close 44 Duckwall stores and redeploy the capital into higher-return ALCO stores. The Company, which currently operates 214 broad line ALCO stores in 23 states, intends to change its corporate name to ALCO Stores, Inc., to reflect its new strategic focus. The name change will likely take place in fiscal 2012.

Rich Wilson, President and Chief Executive Officer, commented: "After careful analysis, we have concluded that the small, limited-selection Duckwall stores no longer meet the needs of most shoppers. These stores account for only 3.9% of sales and little or no profit. Duckwall locations, averaging just 6,755 square feet, consume a disproportionate share of resources in distribution, back-office support, inventory investment and other costs. Plus, the necessary technology upgrades to bring these stores into the corporate IT infrastructure would be cost-prohibitive. These factors led us to conclude that the best course of action is to close the Duckwall stores. We expect that redeploying the resources used in the Duckwall stores to our more productive ALCO stores will improve the Company's earnings."

Wilson added, "Making this change will enable the Company to focus on maximizing the performance of our ALCO stores. In the past eight months, we have upgraded all of the Company's ALCO stores, averaging 25,446 square feet, to better serve consumers and offer expanded selections of food and consumables. ALCO customers are telling us they like the wider aisles, better lighting, expanded food assortment and upgraded selection of merchandise."

Among the 400 new items in ALCO stores are high-quality, lower-cost "Best Choice" and "Always Save" grocery and paper products. These private-label brands are provided through a new partnership with Associated Wholesale Grocers (AWG), which allows ALCO stores to reduce inventory, improve turnover and lower expenses at its distribution facility in Abilene, Kansas. "Our relationship with AWG will allow us to grow profitability in the coming months," Wilson noted.

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