DUCK Alco Stores, Inc. (MM)

CHICAGO, May 2 /PRNewswire/ -- William Blair & Company initiated research coverage of Duckwall-ALCO Stores, Inc. (NASDAQ:DUCK) ($25.40), which operates both discount and variety stores, with an Outperform rating and company profile of Aggressive Growth. Analyst Mark Miller estimated that the company, which operates under two banners -- ALCO discount stores (93% of sales) and Duckwall variety stores (7% of sales) -- would earn $2.00 per share in fiscal 2007 (year ending January 2007) and $2.30 per share in 2008. "A major transformation is taking place at Duckwall-ALCO following a corporate reorganization and the hiring of CEO Bruce Dale," Miller said. "Recent sales and earnings performance has improved significantly, and we believe there could be meaningful financial upside going forward." "We believe that the most important initiative at ALCO currently is the implementation of information technology systems, which include point-of-sale (POS), merchandising, human resources/payroll, and financial systems," he added. "With POS systems installed throughout the stores, the company will have the capability to operate a perpetual inventory system, which tracks on- hand quantities at the item level and facilitates automatic replenishment of merchandise based on rates of sale. We believe the financial benefits of these systems could be substantial to the company." William Blair & Company, L.L.C. ( http://www.williamblair.com/ ) is a Chicago-based investment firm, founded in 1935, offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. As an independent, employee-owned firm, our philosophy is to serve our clients' interests first and foremost. William Blair & Company has offices in Chicago, Hartford, London, San Francisco, Tokyo, Vaduz, and Zurich. William Blair & Company, L.L.C. has received compensation for investment banking services from the company within the past 12 months, or expects to receive or intends to seek compensation for investment banking services in the next 3 months. William Blair & Company, L.L.C. is a market maker in the security of this company and may have a long or short position. For important disclosures and information regarding the firm's rating system, valuation methods and potential conflicts of interest, please visit: http://www.williamblair.com/pages/news_story_dept.asp?uid=1027&depID=4 Additional information is available upon request. William Blair & Company, L.L.C. is a member of the National Association of Securities Dealers, CRD number 1252. DATASOURCE: William Blair & Company, L.L.C. CONTACT: Tony Zimmer of William Blair & Company, L.L.C., +1-312-364-8611, Web site: http://www.williamblair.com/

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