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SERVICE MERCHANDISE ANNOUNCES RESULTS

 SERVICE MERCHANDISE ANNOUNCES RESULTS
 NASHVILLE, Tenn., April 9 /PRNewswire/ -- Service Merchandise


Company, Inc. (NYSE: SME) today announced sales and earnings for the first quarter ended March 31, 1992.
 First Quarter Ended March 31, 1992
 Net sales for the first quarter of 1992 were $664,654,000 compared to $607,727,000 for the first quarter of 1991, an increase of $56,927,000 or 9.4 percent. Comparable store sales increased 5.4 percent for the quarter. The first quarter of 1992 included two additional selling days exclusive of the shift in the Easter holiday, as compared to the first quarter of 1991. The Company has added a net of 14 stores since the first quarter of last year.
 The net loss for the three months ended March 31, 1992 was trimmed to $(9,391,000) or $(.14) per share compared to a net loss of $(13,246,000) or $(.20) per share for the same quarter last year. The reduced quarterly net loss was achieved from decreased interest expense and increased sales.
 Gross margin for the first quarter of 1992, after taking into account buying and occupancy expense, was $157,099,000 as compared to $147,941,000 for the same quarter last year, an increase of $9,158,000. As a percentage of net sales, gross margin, after taking into account buying and occupancy expense, was 23.6 percent as compared to 24.3 percent for the first quarter of 1991. The decrease in margin rate reflected lower jewelry and hardlines margins, the result of competitive pricing strategies and additional promotional activity.
 Selling, general and administrative expenses as a percentage of net sales decreased to 20.7 percent for the first quarter of 1992 from
21.5 percent for the first quarter of 1991. This decrease was attributable to the Company's continued effort to control all expense categories.
 Interest expense on debt and capitalized leases decreased $4,708,000 or 17.7 percent as compared to the first quarter of 1991. The lower interest expense was due to the favorable impact of reduced interest rates and the reduction of recapitalization debt.
 During the first quarter of 1992, the Company prepaid $27.6 million of the recapitalization term loan debt. Total long-term debt including current maturities decreased to $682.7 million at March 31, 1992 from $769.2 million at March 31, 1991. The reduction was the result of scheduled payments and prepayments.
 Raymond Zimmerman, President and Chairman of the Board, stated, "The first quarter net loss decreased 29.1 percent as we continued to benefit from the reduction of recapitalization debt. The decreased loss also reflected improved sales resulting from more competitive pricing, and successful management of all expense categories."
 Service Merchandise Company, Inc., "America's Leading Jeweler," operates 360 catalog stores in 36 states.
 SERVICE MERCHANDISE COMPANY, INC. (N)
 (in thousands except per share data)
 Three Months Ended
 3/31/92 3/31/91
 Net Sales $664,654 $607,727
 Net Loss ($9,391) ($13,246)
 Loss Per Share(A) ($0.14) ($0.20)
 Weighted Average Common
 Shares and Common Share
 Equivalents Outstanding(A) 67,452 66,291
 Comparable Store Sales Increase 5.4 pct.
 (A) All per share data has been restated to reflect the five-for-four common stock split effected in the form of a 25 percent stock dividend in May of 1991.
 -0- 4/9/92
 /CONTACT: S.P. Braud, Corporate Vice President, Treasurer, CFO, Service Merchandise Company, Inc., 615-660-3300/
 (SME) CO: Service Merchandise Company, Inc. ST: Tennessee IN: REA SU: ERN


DF-CM -- CH009 -- 6920 04/09/92 16:13 EDT
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Date:Apr 9, 1992
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