Posted on 01/04/2002 12:53:47 PM PST by ABC123
NASHVILLE, Tenn. –– Service Merchandise Co. Inc., a 42-year-old retail chain that has operated under Chapter 11 bankruptcy protection since March 1999, announced Friday that it is going out of business.
Company executives said the weak economy and slow sales after the Sept. 11 terrorist attacks hurt the company's 2001 results and prevented it from completing its planned business reorganization and emergence from bankruptcy.
Service Merchandise, with more than 200 stores in 32 states, reported losses of $180 million in 2000 and as of November had liabilities totaling $1.34 billion and assets of $1 billion.
"Given the extraordinarily poor retail economy this past year, especially for jewelry retailers, our company's prospects for successfully reorganizing were compromised to the point that we and our creditors consensually concluded that winding down the business and distributing the substantial value of our inventory, real estate and other assets to our creditors was in their best interest," chairman and chief executive Sam Cusano said.
"While we wish the final result could have been otherwise, our foremost goal throughout the cases has been to maximize value for our stakeholders and we are doing so through this course of action."
The company says it will fire about 500 of its 9,300 employees in January, with the others receiving staggered termination notices throughout out the year.
The company will begin going-out-of-business sales Jan. 19 at its stores, pending approval by the U.S. Bankruptcy Court for the Middle District of Tennessee.
Service Merchandise said it intends to file a plan of liquidation by Sept. 30, to provide for the distribution of the proceeds of its assets to creditors.
The company expects shareholders will not receive any distribution on their common stock in 2002.
Service Merchandise said employee severance and other benefit payments would be paid in accordance with orders from the bankruptcy court.
The company will also sell its real estate, including its headquarters in suburban Nashville, 70 fee-owned properties and 150 unexpired leaseholds.
During the 1970s, Service Merchandise was the nation's top catalog-showroom retailer. At its peak, the company achieved more than $4 billion in annual sales.
In recent years, however, sales at Service Merchandise drastically dropped. The company responded with a series of restructuring plans, starting in 1997.
While changing its retail format, a small group of creditors filed an involuntary petition under Chapter 11 on March 15, 1999, seeking court supervision of the company's restructuring. The company later filed a voluntary Chapter 11 petition and management improved relations with its vendors and stabilized its business.
Over the past two years, Service Merchandise reduced its holdings from about 350 stores to 216 and about 41,000 employees to 9,300.
In February 2000, Service Merchandise discontinued unprofitable product lines such as electronics, toys and sporting goods and focused on jewelry and home products. It also rented its stores to other businesses.
© 2002 The Associated Press
I guess I'll quit sending you Christmas cards at that address. Sheesh.
I was paying cash for some coax one time and the dude wanted my address, so I told him:
666 Listmakers Place
Hell, NJ
He gave me a smirk and I asked "Are you going to sell me the cable or not?" He did.
No, they don't. They've gotten so many complaints that they've given the customer an (unannounced) option. Just say, "Cash sale, decline info" and the doofus behind the counter will ring you up. I was told this by a RS employee some years ago. "You don't HAVE to give it to them," he told me. "Just say "decline" and they won't bug you any further.
As for Lack-Of-Service Merchandise, I never could see the attraction. They offered, belying their name, no service whatsoever. You have to find it, fill out a requisition slip, then stand around while someone in the back found it for you. The stores had no "cachet," i.e., a sense of good brand identity, and carried only a limited amount of merchandise at each store...apparently not wanting to confuse the customer with choices. It's all ordinary stuff, no better than you'd find at Walton's Emporium, priced higher. They carried many closeouts masqueraded as current merchandise. And they basically became a store for the uneducated consumer - a person that just doesn't know that there's better out there, for less.
Got to give them one thing, however. They sure, towards the end, became avid Equal Opportunity Employers. Lights on, but nobody home.
Don't get me started on Lucent. Anytime you start selling off assets to meet current expenses, you deserve any Wall St. drubbing you get.
Michael
Service S#%ked
I told them last time that they were disorganized and lazy. They never staffed adequately and even the jewlery section was a mess cause of the pick a number and wait. Good Riddance and Good-Bye
Michael
Sears, JC Pennys are to be next.
What about sad clown paintings or 'real-woodgrain' fiberboard bookshelves? Thank God we still have Home Shopping Network to supply all of our rhinestone and Technibond jewelry needs.
What's the issue here? I'm just completetly forthright with them and tell them they can't have my address and they always leave me alone.
It is six weeks to Valentine's Day and Service Merchandise sells jewelry. Good timing.
I've always regarded this brand on the same level as 'Juliette' in stereo hi-fi equipment. Remember Juliette? How about Symphonic? But recently, while researching programmable universal remotes, I discovered that Radio Shack has one of the best buys, model # 15-1994 (now replaced by 15-2104) which apparently has its own fan club. $39, $29 on sale.
Naah. I like to send a message where it counts. The stupid address request policy wasn't drawn up by the front-line cashiers, but by corporate office numbnuts. I try to be as good as I can to cashiers who are just doing their jobs and who have probably had several pinhead customers give them grief over the address request among other things. Let the corporate office idiots deal with the bogus addresses when mail gets returned to them.
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