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

Humble in Hofstra...One Debate an Election Can Make

Sep 26 2016 | 10:20am ET

Tonight's U.S. Presidential debate, infamously coined the “Humbling in Hofstra...

Lifestyle

Vortic: Reimagining the Custom Wristwatch

Sep 27 2016 | 7:24pm ET

American watch manufacturer Vortic, which started out restoring antique pocket watch...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...