Duckwall-ALCO Stores Reports Positive December Sales Results

Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK) today announced that sales from continuing operations for the most recent fiscal five-week period ending January 2, 2011, increased 7.3% to $69.4 million compared to $64.7 million in the prior-year month. Same-store sales increased 1.1%. Sales results for the 43 Duckwall stores to be closed in January have been excluded from same-store sales for the period and year-to-date.

Sales year-to-date decreased 0.5% to $447.1 million compared to prior-year sales of $449.4 million, and same-store sales decreased 2.5%.

Rich Wilson, President and Chief Executive Officer, commented, "Comparable sales for the critical November and December holiday period increased 2.7%. After a same-store sales decrease for the first six months of the year, we achieved a turnaround in the trend, delivering a 0.4% same-store sales increase from August through December."

Departments with the strongest performance for December included food and consumables, electronics, apparel, small appliances and housewares. Departments performing lower than company trend included toys, home decor, stationery, and shoes.

Wilson added; "The Company has completed a significant number of initiatives in the past eight months including re-setting every ALCO location to improve space productivity and enhance the customer experience. We have also integrated two new control brands from Associated Wholesale Grocers – 'Best Choice' and 'Always Save' – converted the distribution center to a flow-through model, added technology to the direct store delivery process, and most recently closed the Duckwall operation. When taken in combination, these actions have begun to improve results and more importantly provide the foundation for future growth and profitability."

About Duckwall-ALCO Stores, Inc.

Duckwall-ALCO Stores, Inc. is a regional broad line retailer that specializes in meeting the needs of smaller, underserved communities across 23 states, primarily in the central United States. The Company offers an exceptional selection of quality products and recognized brand names at reasonable prices. Its specialty is delivering those products with the friendly, personal service its customers have come to expect. With 214 ALCO stores, the Company is proud to have continually provided excellent products at good value prices to its customers for 109 years. To learn more about the company visit www.ALCOstores.com.

The Duckwall-ALCO Stores, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5865

Forward-looking statements

This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 ("the Act"). Forward-looking statements can be identified by the inclusion of "will," "believe," "intend," "expect," "plan," "project" and similar future-looking terms. You should not rely unduly on these forward-looking statements. These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments, and Company performance. Forward-looking statements inherently involve risks and uncertainties, and, accordingly, actual results may vary materially. 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 10-Q filings and other public documents, copies of which are available from the Company on request and are available from the United States Securities and Exchange Commission.

CONTACT: Wayne S. Peterson
         Senior Vice President - Chief Financial Officer
         785-263-3350 X164
         email: wpeterson@ALCOstores.com
         or
         Debbie Hagen
         Hagen and Partners
         913-652-6547
         email: dhagen@hagenandpartners.com

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