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Service Merchandise
Service Merchandise was a retail chain of catalog showrooms carrying jewelry, toys, sporting goods and electronics. The company, which first began in 1934 as a five-and-dime store, was in existence for 68 years before ceasing operations in 2002.
Service Merchandise's history can be traced to 1934, to a small five-and-dime store founded by Harry and Mary Zimmerman in the town of Pulaski, Tennessee. After leaving the wholesale business, they opened Service Merchandise, Inc., the first of what evolved into a chain of catalog showrooms. It opened in 1960 at 309 Broadway in downtown Nashville, Tennessee.
During the 1970s and 1980s, Service Merchandise was a leading catalog-showroom retailer. At its peak, the company achieved more than $4 billion in annual sales. As the company expanded, it began to open showrooms nationwide, mostly in the vicinity of major shopping malls, which were in vogue in the 1970s. In the early 1980s, the Service Merchandise headquarters moved from Nashville to nearby Brentwood, Tennessee, becoming one of the first businesses to plant itself in the area that is now known as Cool Springs. During that same time, and into the 1990s, the company became a prominent sponsor of game shows such as Wheel of Fortune and The Price Is Right, where the company provided some of the prizes awarded to contestants.
In May 1985, Service Merchandise acquired the H. J. Wilson Co. for approximately $200 million. Raymond Zimmerman, the CEO, was attracted to Wilson's stores to gain a stronger foothold in the Sun Belt states. Several of these Wilson's locations included an off-priced apparel department of about 15,000 square feet (1,400 m2). Service Merchandise also had other wholly owned subsidiaries featuring retail stores, such as Zim's Jewelers, HomeOwners Warehouse (later called Mr. HOW Warehouse), The Lingerie Store and The Toy Store.
The company lost market share in its housewares and electronics sectors to giant discounters, such as Walmart and Bed Bath & Beyond, and later Best Buy and Circuit City. Although Service Merchandise was early to embrace the Internet in the 1990s, generating tens of millions of dollars in sales, it was not enough to offset the damage done by the mega-chain stores springing up nationwide.[citation needed]
Gary M. Witkin was appointed to the new position of president and chief operating officer in 1994.
The company responded to the market pressures with a series of restructuring plans that included the discontinuation of unprofitable product lines, including electronics, toys and sporting goods, and refocusing on jewelry, gifts and home decor products. Many of its showrooms were also closed or downsized significantly.
While in the process of changing its retail format, a group of creditors forced an involuntary petition for bankruptcy under Chapter 11 on March 15, 1999, seeking court supervision of the company's restructuring. The company later filed a voluntary Chapter 11 petition to improve relations with its vendors and creditors in an effort to stabilize its business. At the time, it was one of the top ten bankruptcy cases in the nation.
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Service Merchandise
Service Merchandise was a retail chain of catalog showrooms carrying jewelry, toys, sporting goods and electronics. The company, which first began in 1934 as a five-and-dime store, was in existence for 68 years before ceasing operations in 2002.
Service Merchandise's history can be traced to 1934, to a small five-and-dime store founded by Harry and Mary Zimmerman in the town of Pulaski, Tennessee. After leaving the wholesale business, they opened Service Merchandise, Inc., the first of what evolved into a chain of catalog showrooms. It opened in 1960 at 309 Broadway in downtown Nashville, Tennessee.
During the 1970s and 1980s, Service Merchandise was a leading catalog-showroom retailer. At its peak, the company achieved more than $4 billion in annual sales. As the company expanded, it began to open showrooms nationwide, mostly in the vicinity of major shopping malls, which were in vogue in the 1970s. In the early 1980s, the Service Merchandise headquarters moved from Nashville to nearby Brentwood, Tennessee, becoming one of the first businesses to plant itself in the area that is now known as Cool Springs. During that same time, and into the 1990s, the company became a prominent sponsor of game shows such as Wheel of Fortune and The Price Is Right, where the company provided some of the prizes awarded to contestants.
In May 1985, Service Merchandise acquired the H. J. Wilson Co. for approximately $200 million. Raymond Zimmerman, the CEO, was attracted to Wilson's stores to gain a stronger foothold in the Sun Belt states. Several of these Wilson's locations included an off-priced apparel department of about 15,000 square feet (1,400 m2). Service Merchandise also had other wholly owned subsidiaries featuring retail stores, such as Zim's Jewelers, HomeOwners Warehouse (later called Mr. HOW Warehouse), The Lingerie Store and The Toy Store.
The company lost market share in its housewares and electronics sectors to giant discounters, such as Walmart and Bed Bath & Beyond, and later Best Buy and Circuit City. Although Service Merchandise was early to embrace the Internet in the 1990s, generating tens of millions of dollars in sales, it was not enough to offset the damage done by the mega-chain stores springing up nationwide.[citation needed]
Gary M. Witkin was appointed to the new position of president and chief operating officer in 1994.
The company responded to the market pressures with a series of restructuring plans that included the discontinuation of unprofitable product lines, including electronics, toys and sporting goods, and refocusing on jewelry, gifts and home decor products. Many of its showrooms were also closed or downsized significantly.
While in the process of changing its retail format, a group of creditors forced an involuntary petition for bankruptcy under Chapter 11 on March 15, 1999, seeking court supervision of the company's restructuring. The company later filed a voluntary Chapter 11 petition to improve relations with its vendors and creditors in an effort to stabilize its business. At the time, it was one of the top ten bankruptcy cases in the nation.