Strongbow Capital Takes Aim At Duckwall

Nov 27 2007 | 12:40pm ET

Activist hedge fund shop Strongbow Capital Management is taking aim at the management of Duckwall-ALCO Stores and is making noise about nominating new directors at the regional retailer’s 2008 annual meeting.
 
On Nov. 20, Strongbow’s chairman Raymond French sent a letter to Duckwall’s board and management venting his frustration at the company’s failed three-year turnaround program.

“To date, along with the company’s other shareholders, we have been patient with the current board and current management in achieving the financial goals espoused by the company’s chairman and CEO at the start of the three-year turnaround program,” wrote French. “In the last fiscal year the company achieved an ROE of 5.5%; further, in the 12-month period ended with the second quarter of this year, it achieved an ROE of 3.88%. Even if the company achieves its operating plan for this fiscal year, it will still fall far short of a mid-teens percentage ROE.”

And unless French sees “satisfactory concrete progress in the problem areas” and an “acceptable” improvement in the company’s 12-month run-rate ROE by the end of Q3 of this fiscal year, he is threatening to nominate a slate of directors for election to the board and make other proposals at that 2008 annual meeting.

Strongbow Capital currently owns 543,517 shares, or 14.27% of Duckwall, making it the largest shareholder of the company.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note