March 17, 1999
Service Merchandise Files Chapter 11
Service Merchandise Co. filed a petition for Chapter 11 bankruptcy protection this week, on the heels of an announcement last month that the discount retailer would close 134 stores.
The filing comes after five vendors, including Samsonite and Remington, filed a petition seeking court supervision of Service Merchandise's restructuring, according to the Associated Press. The retailer owes the vendors more than $8 million.
Service Merchandise will also lay off employees at its Brentwood, TN, headquarters and close a distribution center in Dallas, TX, the company announced last week. In the meantime, CEO Bettina Whyte says employees and vendors will continue to be paid and store policies regarding returns and gift certificates will remain the same. Whyte says Chapter 11 will turn Service Merchandise into a "more focused and healthier chain." Service Merchandise is currently the second largest mass market jewelry retailer in the U.S.
- by Stacey King