Wednesday, March 17, 1999
Service Merchandise forced into bankruptcy
Bloomberg News
NASHVILLE — Service Merchandise Co., a troubled specialty retailer, said Tuesday that five vendors had forced it into court-supervised reorganization by filing an involuntary Chapter 11 bankruptcy petition.
Samsonite Corp. of Denver said it is owed $3.62 million; Remington Products Co. LLC of Bridgeport, Conn., claimed $3.64 million; and Toy Biz Inc., a division of Marvel Enterprises of New York, said it is owed $707,342.
Brentwood, Tenn.-based Service Merchandise, once the largest retailer of its kind in the United States with more than 200 stores, said it would file a voluntary petition to avoid “protracted litigation” with the vendors. The chain operates five stores in Greater Cincinnati.
“The company plans to uti lize the Chapter 11 process (to transform) Service Merchandise into a stronger, more focused and healthier chain,” Chief Executive Bettina M. Whyte said in a statement. “Our stores will be open for business as usual.”
The other vendors are American Glass Inc. of Mount Pleasant, Pa., owed $215,220, and Designer Automotive Products Inc. of Arlington, Texas, owed $43,492.
Stores, offices and distribution centers will continue normal operations, and employees should continue to be paid “without interruption” while the company seeks a debtor-in-possession loan to help it through the reorganization process, officials said.
Service Merchandise, which once had 25,000 employees in about 350 stores in 34 states, reported $3.66 billion in sales for 1997.
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