February 11, 1999
Service Merchandise Closes 134 Stores
Catalog showroom retailer Service Merchandise plans to "refine its niche" in fine jewelry, gifts and home products after it closes 134 underperforming stores nearly 40% of its locations over the next four months.
Despite the company's efforts to turn itself around by adding products and eliminating its catalog and clipboard-ordering system, sales have continued to fall and the store closed 50 stores since 1997. Share prices fell from $4.87 in October to $0.44 in January.
Analysts say the company's troubles relate to overcoming its image as a catalog retailer. "Consumers have no clear idea of what it is and what it tries to do," one analyst told the Associated Press. "If you want a toaster, for example, the first company you think of is Wal-Mart or Kmart."
Service Merchandise will release the list of affected stores shortly and will hold inventory clearance sales. The retailer, which plans to keep 213 stores, is currently the second largest mass market jewelry retailer in the U.S.
- by Stacey King