ALCO Stores

ALCO Stores was an American regional discount retailer whose history began in 1901, when Alva Lease Duckwall established a variety-store business in Kansas. The company initially operated five-and-dime stores under the Duckwall's name, selling a broad assortment of inexpensive everyday merchandise. Over time, it developed a larger discount-store format under the ALCO name, designed to provide a more extensive selection than the traditional variety stores. The first ALCO store opened in Clovis, New Mexico, on August 15, 1966. Unlike the smaller Duckwall's stores, ALCO locations were general-merchandise discount stores offering a broad mix of food, apparel, household goods, home products, electronics, seasonal merchandise, and other consumer items. The format was generally smaller than a Walmart or Target supercenter and was intended to provide one-stop shopping in communities that often lacked a direct large-chain competitor. The company expanded through acquisitions and a mixture of ALCO and Duckwall's stores. Acquisitions included Sterling Stores and its Sterling and Magic Mart locations in 1983, David's in 1984, Hornsby in 1985, the Val chain in 1996, and stores acquired from Perry Brothers in 1997. In 1985, the business underwent a management-led leveraged buyout. At that time it operated 127 ALCO stores and 33 Duckwall's stores across 14 states. ALCO experienced an earlier financial crisis when Duckwall-ALCO filed for Chapter 11 bankruptcy protection in May 1989. The company emerged in 1991 with financing from GE Capital, while at least 52 stores were closed during the restructuring. After that reorganization, management emphasized communities without direct competition from Walmart, Target, or Kmart. The approach initially supported further growth: by June 2008, the chain had 205 ALCO stores and 59 Duckwall's stores. The company also tested alternative formats. A combination discount and food concept called C.O.L.A., or Cost of Living Adjusters, was tried in Mineral Wells, Texas, but was discontinued. ALCO later introduced the ALCO Market Place concept, which added a limited selection of perishable foods while remaining substantially smaller than a conventional supercenter. In November 2010, Duckwall-ALCO announced the closure of all 44 Duckwall's stores. One location in Hettinger, North Dakota, reopened under the ALCO name, while the other 43 stores closed permanently. The company subsequently abandoned the Duckwall name and operated as ALCO Stores, Inc. An attempt to expand into the Dallas–Fort Worth metropolitan area with a Grand Prairie, Texas, store opened in fall 2011 but closed in May 2014 after weak sales. Corporate headquarters moved from Abilene, Kansas, to Coppell, Texas, on April 10, 2013, although the company retained a large distribution center in Abilene. ALCO's later years were marked by pressure from national discount chains, supermarkets, changing consumer spending, and e-commerce. On October 12, 2014, the company filed for Chapter 11 bankruptcy, citing increased competition, weaker consumer and business confidence, lower customer traffic, and reduced discretionary spending. A liquidation firm joint venture submitted the only bid received in the bankruptcy process and was approved as the buyer in November 2014. Going-out-of-business sales began on November 21, 2014, and the final ALCO store closed in March 2015. After liquidation, parts of the store portfolio were absorbed by other retailers. Shopko acquired 20 locations and converted them into Shopko Hometown stores, while Bomgaars acquired 12 former ALCO sites. Other locations went to various local or regional operators, and Orscheln Farm & Home acquired the former distribution center in Abilene. ALCO therefore ended as a defunct regional retail chain rather than continuing under new ownership as a national brand.

ALCO Stores developed from the variety-store business founded in Kansas by Alva Lease Duckwall in 1901. Its early stores operated as Duckwall's five-and-dime or variety stores, emphasizing inexpensive general merchandise. The company later created a larger discount-store format under the ALCO name. The first ALCO store opened in Clovis, New Mexico, on August 15, 1966, offering a wider assortment than the company's traditional variety stores. The chain expanded both organically and through acquisitions. In 1983 it acquired Sterling Stores, which operated Sterling and Magic Mart locations in Arkansas and Mississippi. It acquired David's in Wichita, Kansas, in 1984 and Hornsby, a nine-store Illinois chain, in 1985. The same year, the company underwent a management-led leveraged buyout and operated 127 ALCO stores and 33 Duckwall's stores in 14 states. Later acquisitions included the Val chain in Indiana and Ohio in 1996 and 18 Perry Brothers stores in Texas and New Mexico in 1997. Duckwall-ALCO filed for Chapter 11 bankruptcy in May 1989. The company emerged in 1991 after arranging financing from GE Capital, its principal creditor, and closed at least 52 stores during the restructuring. Following bankruptcy, the retailer concentrated on small communities where Walmart, Target, Kmart, or another direct large-format competitor was absent. This local-market strategy initially supported growth, with 205 ALCO stores and 59 Duckwall's stores reported by June 2008. The company experimented with several formats. Its C.O.L.A. concept combined discount merchandise with food in Mineral Wells, Texas, but was discontinued. It also developed ALCO Market Place stores with a limited perishable-food assortment. These stores remained smaller than the supercenters operated by the largest national discount chains. In 2010, the company announced that it would close all 44 remaining Duckwall's stores. One location was converted to ALCO, while the other 43 closed. The company then dropped Duckwall from its corporate identity and operated solely as ALCO Stores, Inc. An expansion into the Dallas–Fort Worth area produced a Grand Prairie store in fall 2011, but the location closed in May 2014 because of weak sales. Corporate headquarters moved from Abilene to Coppell, Texas, in April 2013, while the Abilene distribution center continued to serve the business. ALCO ultimately could not overcome competition from larger discount retailers, supermarkets, and changing shopping patterns. On October 12, 2014, it filed for Chapter 11, citing increased competition, weaker confidence, declining store traffic, and reduced discretionary spending. A liquidation firm joint venture became the approved buyer after submitting the only bankruptcy-court bid. Liquidation sales began on November 21, 2014, and all stores had closed by March 2015. Shopko acquired 20 locations, Bomgaars acquired 12, and other former stores were taken over by assorted operators. Orscheln Farm & Home acquired the former Abilene distribution center.

1. 2015Final store closes

   The last ALCO store closed in March, ending the chain's retail operations.

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2. 2014Second Chapter 11 bankruptcy and liquidation

   ALCO filed for Chapter 11 in October, and liquidation sales began in November after a liquidation buyer was approved.

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3. 2013Corporate headquarters moves to Texas

   ALCO moved its headquarters from Abilene, Kansas, to Coppell, Texas, on April 10.

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4. 2010Duckwall's name is retired

   The company announced the closure of all 44 Duckwall's stores, with one location reopening as ALCO and the others closing.

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5. 2008Chain reaches expanded store base

   By June, the company operated 205 ALCO stores and 59 Duckwall's stores.

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6. 1997Perry Brothers stores acquired

   The company acquired 18 Perry Brothers stores in Texas and New Mexico and converted them to Duckwall's stores.

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7. 1996Val chain acquired

   ALCO acquired the 14-store Val chain in Indiana and Ohio.

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8. 1991Company emerges from first bankruptcy

   The company exited Chapter 11 with financing from GE Capital after closing at least 52 stores.

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9. 1989First Chapter 11 bankruptcy

   Duckwall-ALCO sought Chapter 11 protection during an earlier financial restructuring.

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10. 1985Management-led leveraged buyout

    Following acquisitions including David's and Hornsby, the company underwent a management-led leveraged buyout and operated 127 ALCO and 33 Duckwall's stores.

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11. 1983Sterling Stores acquired

    ALCO acquired Sterling Stores, including stores operating under the Sterling and Magic Mart names in Arkansas and Mississippi.

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12. 1966First ALCO store opens

    The first ALCO discount store opened in Clovis, New Mexico, on August 15, introducing a larger-format alternative to the company's Duckwall's variety stores.

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13. 1901Duckwall's business is founded

    Alva Lease Duckwall established the Kansas variety-store business that eventually developed into ALCO Stores.

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Value-oriented, one-stop general merchandise retail for small cities, rural communities, and markets lacking a direct large-chain discount competitor

• ALCO general-merchandise storesDiscount retail format1966

  ALCO's principal format was a regional discount store offering a broad assortment of everyday goods. Typical departments included food, apparel, household merchandise, home goods, electronics, toys, sporting goods, and seasonal products. The stores were designed to be smaller than major national supercenters while still providing one-stop shopping in communities that often had limited access to large-format retail.

• ALCO Market PlaceDiscount retail with grocery

  ALCO Market Place was an expanded store concept that added a limited selection of perishable foods to the general-merchandise assortment. The format sought to combine discount shopping with elements of a supermarket, while remaining considerably smaller than the supercenters operated by Walmart and Target.

• C.O.L.A. storesDiscount and food retail

  C.O.L.A., short for Cost of Living Adjusters, was an experimental combination discount and food-store format tested by the company in Mineral Wells, Texas. The concept was discontinued and did not become a continuing ALCO format.

• Duckwall's variety storesVariety retail1901

  Duckwall's was the company's original five-and-dime or variety-store format. These smaller stores carried inexpensive general merchandise but offered a narrower assortment than ALCO stores. The remaining Duckwall's locations were closed or converted in 2010.

• 2014Second Chapter 11 filing and liquidationOther

  ALCO cited increased competition, declining consumer and business confidence, reduced customer traffic, and lower discretionary spending.

  What changed. The company filed for Chapter 11 on October 12, 2014. A liquidation-firm joint venture was approved as the buyer after submitting the only bankruptcy-court bid, and going-out-of-business sales began on November 21.

  Aftermath. All ALCO stores closed by March 2015. Shopko acquired 20 former locations, Bomgaars acquired 12, and other sites were taken over by different operators.

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• 2011Dallas–Fort Worth market entryStrategy

  ALCO attempted to extend its small-market discount format into the Dallas–Fort Worth metropolitan area.

  What changed. The company opened a store in Grand Prairie, Texas, in fall 2011.

  Aftermath. The store closed in May 2014 after lackluster sales.

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• 2010Retirement of the Duckwall's nameStrategy

  The company operated both ALCO discount stores and smaller Duckwall's variety stores, but decided to eliminate the latter format.

  What changed. It announced the closure of all 44 Duckwall's stores. One location reopened as ALCO, and the company subsequently dropped Duckwall from its corporate name.

  Aftermath. ALCO Stores, Inc. became the sole operating brand, while the remaining Duckwall's locations closed permanently.

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• 1989First Chapter 11 restructuringOther

  Duckwall-ALCO faced financial pressure and entered Chapter 11 bankruptcy protection in May 1989.

  What changed. The company reorganized, closed at least 52 stores, and secured financing from GE Capital.

  Aftermath. The company emerged from bankruptcy in 1991 and adopted a strategy focused on communities without direct large-chain competitors.

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• 2015The last ALCO store closes

  After liquidation sales began in November 2014, the final ALCO location closed in March 2015.

  BankruptcyOther
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• 2014ALCO files for Chapter 11 bankruptcy

  ALCO filed for bankruptcy protection amid increased competition, declining customer traffic, and lower consumer spending, especially on discretionary merchandise.

  Bankruptcy
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• 2014Liquidation buyer approved in ALCO bankruptcy case

  A liquidation-firm joint venture submitted the only bid received by the bankruptcy court and was approved as the buyer, leading to chainwide going-out-of-business sales.

  BankruptcyM&A
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• 2013ALCO moves its corporate headquarters to Coppell, Texas

  ALCO Stores moved its corporate headquarters from Abilene, Kansas, to Coppell, Texas, while retaining its large distribution center in Abilene.

  Other
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• 2010Duckwall-ALCO announces the closure of its Duckwall's stores

  The company announced that all 44 Duckwall's locations would close. One store was subsequently reopened as an ALCO location, while the remaining Duckwall's stores shut permanently.

  Other
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1. ALCO Stores