Service Merchandise
| Company type | Private (formerly public) |
|---|---|
| Industry | Retail |
| Founded | 1934 in Pulaski, Tennessee, United States |
| Founder | Harry Zimmerman, Mary Zimmerman |
| Defunct | 2002 |
| Fate | Closed after bankruptcy |
| Headquarters | Brentwood, Tennessee , United States |
Area served | United States |
Key people | Raymond Zimmerman (former CEO and chairman), Gary M. Witkin (former president and COO) |
| Products | Jewelry, toys, sporting goods, electronics, gifts, home furnishings |
Service Merchandise was a retail chain specializing in catalog showrooms that sold jewelry, toys, sporting goods, and electronic products. Established in 1934 by Harry and Mary Zimmerman as a five-and-dime store, it shifted to a catalog showroom format in 1960 and operated for nearly seven decades before closing its doors in 2002.
History
The origins of Service Merchandise trace back to 1934 when Harry and Mary Zimmerman opened a modest five-and-dime shop in Pulaski, Tennessee. Moving away from wholesale operations, the company inaugurated its first catalog showroom in downtown Nashville in 1960.
Throughout the 1970s and 1980s, Service Merchandise emerged as a dominant player in the catalog showroom sector, achieving annual revenues surpassing $4 billion. The chain expanded extensively across the United States, positioning its showrooms strategically near prominent shopping malls. In the early 1980s, the corporate headquarters were relocated to Brentwood, Tennessee, marking its establishment within what is currently recognized as the Cool Springs business area.
In May 1985, under the guidance of CEO Raymond Zimmerman, Service Merchandise enhanced its market presence in the Sun Belt region by acquiring H. J. Wilson Co. for approximately $200 million. Wilson’s stores featured off-price apparel sections averaging about 15,000 square feet. Additionally, the company operated various subsidiaries including Zim's Jewelers, HomeOwners Warehouse (which was later rebranded as Mr. HOW Warehouse), The Lingerie Store, and The Toy Store, thereby broadening its retail offerings.
Decline
Service Merchandise experienced a decline in market share within housewares and electronics segments due to competition from large discount retailers such as Walmart, Bed Bath & Beyond, Best Buy, and Circuit City. Although it was an early adopter of online sales during the 1990s—generating tens of millions in revenue—this was insufficient to counteract the growing dominance of these large chains.
In 1994, Gary M. Witkin assumed the roles of president and COO with the objective of guiding the company through restructuring efforts. The business discontinued underperforming categories like electronics, toys, and sporting goods to concentrate on jewelry, gifts, and home furnishings. This strategic realignment also involved closing or downsizing numerous showroom locations.
Bankruptcy and closure
Amid persistent financial difficulties, creditors initiated an involuntary Chapter 11 bankruptcy filing against Service Merchandise in March 1999. Subsequently, the company filed voluntarily to facilitate better relations with vendors and creditors during one of the largest bankruptcy cases nationally at that time.
Raymond Zimmerman, descendant of the founding family, stepped down as chairman in November 2000. Attempts to revive operations amid the economic downturn triggered by the September 11 attacks proved unsuccessful. By early 2002, with only around 200 catalog showrooms remaining and stock prices falling below one cent per share, Service Merchandise terminated all operations and shuttered its stores.
Showroom ordering system
Service Merchandise utilized a unique catalog showroom retail concept also employed by retailers such as Brendle's, Best Products, and Sterling Jewelry & Distributing Company—chains that ultimately faced comparable declines.
This model helped reduce inventory shrinkage and enhanced customer convenience by eliminating the need for shoppers to carry merchandise through aisles. Patrons used carbon-copy order forms to note catalog numbers for displayed products that could be tested within showrooms. Catalogs were conveniently placed for customers to browse items not physically exhibited. Orders were entered through clerk-operated computer terminals; payments were collected before customers retrieved their purchases from a stockroom conveyor belt located near the exit.
In the late 1980s, Service Merchandise introduced self-service computer kiosks initially named "Silent Sam," later rebranded as "Service Express," enabling customers to place orders independently.
During the mid-1980s, pilot programs launched drive-through windows at two locations near Chicago and Nashville for phone-in order pickups—a concept that remained exclusive to those sites.
Support for the Muscular Dystrophy Association
Service Merchandise played a key role as a corporate contributor to the Muscular Dystrophy Association. Chairman and CEO Raymond Zimmerman was a regular participant on the yearly Jerry Lewis MDA Telethon, where he represented the company and its clientele in presenting charitable donations.
See also
- Argos – A major UK retailer utilizing a catalog-warehouse distribution system
- Consumers Distributing – A similar retail chain in Canada and the US that also ceased operations
- Witmark – A regional Michigan-based competitor
- Articles with short description
- Retail companies established in 1934
- Retail companies disestablished in 2002
- Consumer electronics retailers of the United States
- Defunct retail companies of the United States
- Online retailers of the United States
- Catalog showrooms
- Companies that filed for Chapter 11 bankruptcy in 1999
- 1934 establishments in Tennessee
- 2002 disestablishments in Tennessee
- American companies established in 1934
- American companies disestablished in 2002
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- Companies of the United States by year of establishment