Service Merchandise was a retail chain of catalog showrooms that carried jewelry, toys, sporting goods and electronics.
History[]
Founders Harry and Mary Zimmerman of Pulaski, Tennessee first started out as a small five-and-dime store in 1934. After they left the wholesale business, they founded Service Merchandise, which first opened in Nashville, Tennessee in 1960 as a chain of catalog showrooms.
In the '70s and '80s, Service Merchandise was a leading catalog-showroom retailer and at its peak, it achieved more than $4 billion in annual sales. As the business expanded, it began opening showrooms nationwide (mostly in the vicinity of major shopping malls).
In the early '80s, the Service Merchandise headquarters relocated from Nashville to Brentwood, Tennessee, becoming one of the first businesses to plant itself in the area that is now known as Cool Springs. In 1985, they acquired the H.J. Wilson Co. for approximately $200 million. It 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 store was also a prominent sponsor on the television game show, "Wheel of Fortune" and also provided prizes on other shows such as "The Price is Right", "Classic Concentration", "Shop 'til You Drop" and "Shopping Spree".
Decline and bankruptcy[]
In later years, Service Merchandise lost its marketshare in housewares and electronic sectors to stores such as Walmart, Bed, Bath, & Beyond, Best Buy and Circuit City. Although the store 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 that were springing up nationwide.
In 1994, Gary M. Witkin was appointed to the position of president & CEO of Service Merchandising. The company responded to the market pressures with a series of restructuring plans that included discontinuing unprofitable product lines such as toys, electronics and sporting goods, and refocused on jewelry, gifts and home decor products.
Many of their showrooms were also closed or downsized significantly. During this time, it was successful in sub-dividing a number of its company-owned stores into two or three units and sub-leasing the newly created spaces to other national chains, thus reducing costs and generating more store traffic.
On March 15, 1999 (while in the process of changing its retail format), a group of creditors forced an involuntary petition for Chapter 11 bankruptcy, seeking court supervision of the company's restructuring. Service Merchandise later filed a voluntary Chapter 11 petition to improve relations with its vendors and creditors in order to stabilize their business.
In November of 2000, Raymond Zimmerman (the son of Harry and Mary Zimmerman) resigned as the company's chairman of the board. Service Merchandise tried to pull themselves out of bankruptcy again during the summer of 2001, but due to the economic downturn following the September 11 attacks, they shut down their stores by early 2002.