BUSINESS NOTES.

RETAILER TO CLOSE STORES, DISTRIBUTION CENTER: Service Merchandise Co., the Tennessee-based catalog showroom retailer, is closing 60 stores and a distribution center in a move that will eliminate 3,300 jobs.

Service Merchandise, which sells jewelry, gifts and home products, has about 400 stores nationwide but sales and profits have been off for several months. Of the 3,300 jobs targeted for cuts, 2,200 are full-time and 1,100 are part-time positions. Most of the stores to close will be in the West, specifically in California.

COCA-COLA SEES SALES INCREASE: Coca-Cola Co. said it expects first-quarter worldwide case sales to rise 7 percent to 8 percent, led by better-than-expected soda sales in the United States.

The world's largest maker of soft drinks said shipments of its syrup to bottlers, who buy the concentrate and turn it into soda, should rise 5 percent to 6 percent.

Analysts said the smaller rise in syrup shipments, which typically track case sales, may indicate that Coke is deferring some revenue to offset an expected gain from an asset sale. That would allow it to match Wall Street's estimates for the quarter and boost sales in the future.

The Atlanta-based company rejected that theory.

KMART PAYS OFF LOAN EARLY: Kmart Corp. said it repaid a $1.2 billion loan one quarter earlier than it expected, a sign of the discount retailer's improving finances.

Kmart received the loan, due in 1999, in June as part of a $3.7 billion financing package the retailer used to shore up its liquidity and financial flexibility. The move bought Kmart time to focus on reviving earnings.

The early payment of the loan is evidence the turnaround efforts are beginning to pay off. Earnings have picked up, though largely because cost cuts more than offset sluggish sales.

While the nation's third-largest retailer has cut more than $1 billion in costs the past two years, sales have continued to lag. Sales for the fiscal fourth quarter ended Jan. 29 fell 2.1 percent to $9.68 billion.

AT&T TO LAY OFF 800 MORE EMPLOYEES: AT&T will lay off 800 managerial employees in a division that designs long-distance programs for business customers, a spokesman said Thursday.

The layoffs will occur this summer at the business markets division, which employs about 16,700 people. The majority of the layoffs will be in New Jersey where the division has its headquarters in Bernards Township.

The layoffs are the latest in AT&T's reorganizing that began in January 1996 with the announcement it was eliminating 17,000 positions over a three-year period.

So far, AT&T has trimmed about 8,500 jobs, according to AT&T.