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SERVICE MERCHANDISE COMPANY REPORTS SECOND QUARTER RESULTS

 SERVICE MERCHANDISE COMPANY REPORTS SECOND QUARTER RESULTS
 NASHVILLE, Tenn., July 9 /PRNewswire/ -- Service Merchandise Company, Inc. (NYSE: SME) today announced sales and earnings for the second quarter ended June 30, 1992.
 Second Quarter Ended June 30, 1992
 Net sales for the second quarter of 1992 were $781,497,000 compared to $747,777,000 for the second quarter of 1991, an increase of $33,720,000 or 4.5 percent. Comparable store sales increased 0.3 percent for the quarter. The Company has added a net of 14 stores since the second quarter of last year.
 The net earnings for the three months ended June 30, 1992 were $6,035,000 or $.06 per share compared to net earnings of $5,386,000 or $.05 per share for the same quarter last year.
 Gross margin for the second quarter of 1992, after taking into account buying and occupancy expense, was $187,982,000 as compared to $188,470,000 for the same quarter last year. As a percentage of net sales, gross margin, after taking into account buying and occupancy expense, was 24.1 percent as compared to 25.2 percent for the second quarter of 1991. The decrease in margin rate reflected lower jewelry and hardlines margins, the result of more aggressive pricing of promotional items.
 Selling, general and administrative expenses as a percentage of net sales decreased to 18.2 percent for the second quarter of 1992 from 18.8 percent for the second quarter of 1991. This decrease was attributable to the Company's continued control of all expense categories.
 Interest expense on debt and capitalized leases decreased $3,605,000 or 13.7 percent as compared to the second quarter of 1991. The lower interest expense was due to the favorable impact of reduced interest rates and the reduction of recapitalization debt.
 Six Months Ended June 30, 1992
 Sales for the six months ended June 30, 1992 were $1,446,151,000 an increase of 6.7 percent over sales of $1,355,504,000 a year ago. Comparable store sales increased 2.6 percent for the first six months of 1992.
 The net loss for the six month period ended June 30, 1992, was $3,356,000 or $.03 per share, compared to a net loss of $7,860,000 or $.08 per share for the same period a year ago.
 Raymond Zimmerman, President and Chairman of the Board stated, "Net earnings for the second quarter, a period of slow economic growth and continued uncertainty, reflect the continued benefit from the reduction of recapitalization debt and continued expense control, offset by lower margins resulting from consumer response to promotional pricing."
 Service Merchandise Company, Inc. "America's Leading Jeweler," operates 364 catalog stores in 36 states.
 SERVICE MERCHANDISE COMPANY, INC. (N)
 (in thousands except per share data)
 Three Months Ended Six Months Ended
 6/30/92 6/30/91 6/30/92 6/30/91
 Net Sales $781,497 $747,777 $1,446,151 $1,355,504
 Net Earnings (Loss) $6,035 $5,386 ($3,356) ($7,860)
 Earnings (Loss)
 Per Share (A) $0.06 $0.05 ($0.03) ($0.08)
 Weighted Average Common
 Shares and Common Share
 Equivalents
 Outstanding(A) 101,749 100,503 101,441 99,951
 Comparable Store
 Sales Increase 0.3pct. 2.6pct.
 (A) All per share data has been restated to reflect the three-for-two common stock split effected in the form of a 50 percent stock dividend in May 1992.
 -0- 7/9/92
 /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 -- CH006 -- 7976 07/09/92 16:04 EDT
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Date:Jul 9, 1992
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