This background is supplied by the company itself and is biased:
"Service Merchandise Company, Inc. is a leading retailer of fine jewelry and home
products, providing dominant fashion forward selection of name brand products and
value pricing in fine jewelry, home accents & furniture, kitchen & dining, travel &
adventure health & exercise, kid essentials, electronics and seasonal. Founded in
Nashville, Tenn., in 1960 by the Zimmerman family, the Fortune 500 Company now
operates over 350 Service Merchandise stores in 34 states.
In October 1960 the Company opened its first catalog showroom in Nashville, Tenn.,
an innovative response to consumer demand for a shopping environment positioned
between the high-priced, brand name department stores and the cheaper, off-brand
discounters. First-year sales, projected at $300,000, were a staggering $726,000.
Business steadily increased through the 1960s, and in 1967 two new stores were
opened, one outside Nashville and one in Memphis, Tenn. By the end of 1971 Service
Merchandise operated five showrooms with sales of $16.7 million.
Consumer acceptance and ongoing increases in sales led to continued expansion. In
1971 the family took the Company public, raising capital for new store construction and
acquisitions. By the end of 1972, 14 stores generated an earnings increase of 130
percent over the prior year.
Acquisitions and new store construction continued through the 1970s. The purchase of
the northeastern 22-store Value House chain and 13 new store openings provided the
largest expansion to date in 1978.
Electronic data transmission improvements continued throughout the 1980s, with the
addition of a satellite linkage between the corporate office and all stores and
subsidiaries. The system provided numerous customer service improvements including
increased transaction capacity, credit card approvals and new product information. In
1981 Harry Zimmerman retired and Raymond Zimmer-man became chief executive
officer. Sales exceeded $1 billion.
Expanding from its Nashville distribution center, Service Merchandise opened its first
regional distribution center in Henderson, Nevada in 1984. Continued expansion
occurred through the 1980s with the opening of additional regional distribution centers in
Dallas, Texas, Orlando, Fla., and Montgomery, N.Y., providing more than three million
square feet for distribution purposes.
In its largest acquisition, Service Merchandise purchased the 80-store H.J. Wilson chain
in 1985, bringing the total number of stores to 287. During this year sales surpassed
the $2 billion mark.
Service Merchandise brought its catalog and flyer production in-house to produce the
millions of catalogs, sales flyers and newspaper inserts distributed annually. Leaping to
the forefront in catalog production, the Company installed a state-of-the-art electronic
publishing system in 1989.
Also in 1989, Service Merchandise successfully completed a $975 million
recapitalization that provided shareholders a special cash dividend of $10 per common
share. The recapitalization was accomplished through the use of senior bank debt and
without any additional subordinated financing.
The Company introduced America's foremost Nationwide Gift Registry in June 1990,
offering on-line, real time access to all Service Merchandise stores, instantly updating
registries whenever a purchase is made. By 1993 Service Merchandise's Gift Registry
became America's #1 Registry Choice, with more than 90,000 couples registered.
Service opened 27 new stores that year.
In 1994, Gary M. Witkin, former Vice Chairman and member of the Board of Directors at
Saks Fifth Avenue, joined the Company as President and Chief Operating Officer. In
response to a highly competitive retail atmosphere, Service Merchandise took
measures to focus even more strongly on customer service. The Company also
introduced an automated scheduling and productivity standards project to provide
better service and improve operating efficiencies. Focusing on markets in Texas and
southern Florida, the Company opened a net of 15 stores, bringing the total to 406.
In 1995, a new senior management team was assembled and the store/field
management group was reorganized to provide more effective leadership at store level.
Sales were in excess of $4 billion.
The Company increased its presence on the Internet with the November 1996
expansion of its web site to allow on-line viewing and purchase of nearly 8,000 catalog
items.
The year 1997 saw a new focus on return on invested capital as the benchmark for
success, and a number of initiatives were implemented to increase that return. These
steps included a store management restructuring; the closing of under-performing stores
and the distribution center serving the majority of those stores; and a consolidation of all
in-store jewelry repair operations into regional repair centers.
Also in 1997, Raymond Zimmer-man passed the Chief Executive Officer title to Gary
Witkin, retaining his Chairman of the Board status until January 1998. The Board of
Directors selected long-time board member James E. Poole as his successor.
By late summer 1998, Service Merchandise had effected a major operational
transformation, improving the customer shopping experience by introducing a
self-service format and a broader selection of fashion-forward home products. To allow
more flexibility in merchandise buying, pricing and marketing efforts, the traditional fall
catalog was discontinued.
Building on the success of its successful Douglasville, Ga., test store, the Company
announced the Fall 1998 opening of five Service Select stores, a smaller format which
features a full jewelry department and an edited 'best of the best' assortment of the
Company's home products selection. In addition, a fine jewelry and home superstore
was opened in Bradenton, FL." |
