Duckwall-ALCO Stores to Close 20 Stores
ABILENE, Kan. -- Duckwall-ALCO Stores, Inc. said yesterday that it would shutter 20 stores, comprising eight ALCOs and 12 Duckwalls, that don't meet the company's minimum return-on-investment threshold. The retailer described the closings as an initiative to improve Duckwall-ALCO's financial performance for its shareholders.
The company said it expects the closing process to take about three months to complete. Duckwall-ALCO has engaged Gordon Brothers Retail Partners, LLC to assist in inventory liquidation and help keep the total cost of closing the stores as low as possible. Duckwall-ALCO's primary lender, Fleet Retail Group, Inc., has agreed to the closings. The retailer estimates that in relation to the closings, it will liquidate about $6.5 million of inventory. Of the stores being closed, the company owns the property on which two ALCOs are located and leases the properties for the remaining 18 stores.
Duckwall-ALCO anticipates that the aggregate cost to close these stores, before income taxes, will be between $3.8 million to $4.8 million. The 20 stores earmarked for closure produced gross sales of $19.9 million in fiscal year 2005.
Dick Mansfield, v.p./finance, treasurer, and c.f.o. of Duckwall-ALCO, said in a statement: "While we understand the impact on these communities and our associates, these stores were not performing at our minimum return-on-investment standards, so we made the very difficult decision to close them. On behalf of our company, I would like to thank our customers for their patronage and our associates for their hard work and dedication over the years."
About 260 employees in the affected stores would be given consideration to relocate within the company, according to Duckwall-ALCO.
Including the stores slated to close, regional retailer Duckwell-ALCO 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.
The company said it expects the closing process to take about three months to complete. Duckwall-ALCO has engaged Gordon Brothers Retail Partners, LLC to assist in inventory liquidation and help keep the total cost of closing the stores as low as possible. Duckwall-ALCO's primary lender, Fleet Retail Group, Inc., has agreed to the closings. The retailer estimates that in relation to the closings, it will liquidate about $6.5 million of inventory. Of the stores being closed, the company owns the property on which two ALCOs are located and leases the properties for the remaining 18 stores.
Duckwall-ALCO anticipates that the aggregate cost to close these stores, before income taxes, will be between $3.8 million to $4.8 million. The 20 stores earmarked for closure produced gross sales of $19.9 million in fiscal year 2005.
Dick Mansfield, v.p./finance, treasurer, and c.f.o. of Duckwall-ALCO, said in a statement: "While we understand the impact on these communities and our associates, these stores were not performing at our minimum return-on-investment standards, so we made the very difficult decision to close them. On behalf of our company, I would like to thank our customers for their patronage and our associates for their hard work and dedication over the years."
About 260 employees in the affected stores would be given consideration to relocate within the company, according to Duckwall-ALCO.
Including the stores slated to close, regional retailer Duckwell-ALCO 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.