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To: Victor Lazlo who wrote (94450)	2/22/2000 10:33:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Amazon in a few more years in my opinion: "February 22, 2000 Service Merchandise Plans to Cut Jobs, Reduce Product Lines in Reorganization An INTERACTIVE JOURNAL News Roundup BRENTWOOD, Tenn. -- Service Merchandise Co. plans to cut 4,800 additional jobs, reduce store sizes and discontinue some product lines as part of its continuing bankruptcy reorganization plan. The retailer was forced into Chapter 11 last March by a group of creditors, claiming total debts of $1.29 billion. The company has so far closed 122 stores and cut 5,000 jobs. "The company continues to make good progress in its restructuring efforts, with 1999 as a year of stabilization for Service Merchandise," Chief Executive Sam Cusano said. The company began notifying workers Tuesday about the latest job cuts. The company currently about 16,000 full-time employees at its Nashville-area offices, three distribution centers and 221 stores in 32 states. The company is reducing the number of products it sells and expanding its core jewelry business, especially diamonds, and its Internet sales. Service Merchandise will spend $150 million of over the next two years to reduce store sizes and remodel showrooms to include more jewelry display cases and Internet kiosks for merchandise orders. The company will rent or sell the surplus store space. The company will no longer sell toys, sporting goods, most consumer electronics and indoor furniture. It will continue to sell housewares, silver, crystal, small appliances, patio furniture, luggage and clocks. "We're no longer going to try to fix those other businesses," Mr. Cusano said. "What we're saying is, we can't be all things to all people." The 40-year-old chain thrived in the 1970s and much of the 1980s, with strong catalog sales for a broad range of products. In its retail stores, customers would identify what they wanted to buy from the catalog, fill out forms on a clipboard, hand them to the cashier to pay, and retrieve the goods at a pickup area. But in the 1990s, Service Merchandise faced growing competition in most major product categories and was pummeled by discount chains on one end and specialty chains on the other. Sales of electronics and toys, for instance, nosedived. The inventory reduction announced Tuesday means the closure of the company's distribution centers in Orlando, Fla., and Montgomery, N.Y., and a consolidation of inventory at its center in Tennessee. The announcements were made as Service Merchandise reported its year-end earnings and a new bank-financing package that will help the company past its emergence from bankruptcy, likely next year. The company expects to get approval of a new four-year, $600 million bank financing agreement from Fleet Retail Finance Inc., replacing a previous financing agreement. It intends to use the funds to pay for its store renovations and other improvements, operating expenses and general working capital once the company emerges from Chapter 11. Service Merchandise posted net income of $21.5 million, or 21 cents a share, for the fourth quarter, compared with a loss of $41.8 million, or 42 cents a share a year earlier. The quarter just ended included reorganization items of $6.16 million and a credit of $6.66 million from the reversal of a restructuring charge. The results for the year-earlier period included a credit of $14.9 million from the reversal of a restructuring charge. Service Merchandise also confirmed it plans to cancel all existing common stock and will not issue new shares to current shareholders in the reorganized company. Shares recently trading over the counter were valued at about 14 cents."