Service Merchandise
From Wikipedia, the free encyclopedia
| Service Merchandise | |
 |
|
| Type of Company | defunct private catalog merchant and showroom; active as Internet retailer |
|---|---|
| Founded | 1934 (revived as an Internet site in 2004) |
| Headquarters | Original company in Brentwood, Tennessee; current company in Boca Raton, Florida |
| Industry | Retail |
| Products | home furnishings, consumer electronics, jewelry, watches, toys |
| Website | http://www.servicemerchandise.com |
Service Merchandise was a chain of large stores carrying fine jewelry, toys, sporting goods, and electronics that existed from 1934 to 2002. The company's former chairman, Raymond Zimmerman, resurrected Service Merchandise as an Internet-only retailer in 2004 after buying the name and logo at auction.
Contents |
[edit] History
[edit] Rise to prominence
Service Merchandise was founded by Harry and Mary Zimmerman as a "five and dime" in 1934. The first catalog showroom opened in 1960 on Broadway in downtown Nashville, Tennessee.
During the 1970s, Service Merchandise was the nation's top catalog-showroom retailer. At its peak, the company achieved more than $4 billion in annual sales. As the company expanded, its headquarters were moved from Nashville to nearby Brentwood, Tennessee, becoming one of the first businesses to plant itself in the area that is now known as Cool Springs.
[edit] Fall from grace
The company thrived into the 1980s but was hit hard by the emergence of giant discounters such as Wal-Mart, who took away their title of "America's Largest Jeweler", and Best Buy, who all but eliminated their business in electronics. Until its closure, however, Service Merchandise continued to be the largest watch retailer in the United States.
Service Merchandise was also late to embrace the Internet in the mid-1990s as a method of doing business, on both the internal and retail levels.
The company responded to its plight with a series of restructuring plans that included the discontinuation of unprofitable product lines such as electronics, toys and sporting goods, and focusing on fine jewelry, gifts, and home decor products. Many showrooms closed, and many that remained open were downsized significantly. The company succeeded in dividing many of its company-owned buildings into two or three parcels and then renting the newly-created space to other national chain retailers.
[edit] Bankruptcy and liquidation
While in the process of changing its retail format, a group of creditors forced an involuntary petition for bankruptcy under Chapter 11 on March 15, 1999, seeking court supervision of the company's restructuring. The company later filed a voluntary Chapter 11 petition to improve its relations with its vendors and creditors, and to stabilize its business.
Raymond Zimmerman, son of the company founders, resigned as chairman of the board in November of 2000. The company had attempted to pull itself out of bankruptcy once again in the summer of 2001, but the economic downturn following the September 11, 2001 attacks proved to be a hurdle the company could not clear [1]. With only 200 catalog showrooms left, stock valued at less than one cent per share, and no profitability in sight, Service Merchandise ceased operations and shuttered all of its stores by early 2002, owing over US$500 million to creditors.
[edit] Return of the name
Service Merchandise resurfaced on the World Wide Web in 2004, selling a similar line of merchandise. Raymond Zimmerman bought the former company's name and logo at auction, and he continues to be the owner of the newly formed company.
[edit] Showroom ordering process
Service Merchandise was well-known for its unique ordering process which emphasized the catalog, even within the showrooms.
For non-jewelry orders, customers would enter the showroom and be given a tablet which included an order form to record the catalog numbers of desired items. Items were displayed in working order in the showroom, allowing customers to test products as they shopped. Current Service Merchandise catalogs were placed in strategic locations throughout the store to allow customers to shop for items that were not on display. When ready to place their orders, customers would take the tablet to a clerk who would act as a cashier and submit the order to the store's stockroom (this process was altered in the late 1980s to allow customers to place their orders and pay by credit card with a computer terminal named "Silent Sam"). The customer would then move to the "Merchandise Pickup Area", where the order would emerge from the stockroom on a conveyor belt.
In addition to jewelry and catalog showroom display items, Service Merchandise also had several self-service items, which were located on shelves, and taken to the checkout to be paid for as in a traditional retail store. These items included many of those in the toy department as well as smaller, low priced items (such as batteries, film, and video cassettes).
The jewelry department, which was featured prominently in the center of every showroom, operated on a first-come, first-served system, in which each customer would be individually served by a jewelry clerk.
In the mid 1990s, the tablets were replaced with barcoded pull tags placed on/near each item in the showroom. These were taken to the cashier instead of the tablet in order to purchase the item, which would still be retrieved from the stockroom. By the late-1990s, many of the showrooms had been converted to allow a more traditional approach to shopping in addition to the catalog ordering process. By 2000, all of the remaining showrooms had been downsized and the catalog-style shopping approach was officially abandoned.
[edit] See also
- Best Products
- Consumers Distributing - a similar (and also failed) retailer in Canada.
