SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities and Exchange Act of 1934
For the fiscal year ended December 31, 1993
Commission File Number: 1-9223
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
SERVICE MERCHANDISE COMPANY, INC.
P.O. Box 24600, Nashville, Tennessee 37202-4600
(mailing address)
7100 Service Merchandise Drive, Brentwood, Tennessee 37027
(address of principal executive office)
This document contains 19 pages.
<PAGE> 2
Financial Statements and Schedules
Description Page
----------- ----
Financial Statements:
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . 3
Statements of Net Assets Available for Plan Benefits as of
December 31, 1993 and December 31, 1992 . . . . . . . . . . . . . . . 4
Statements of Changes in Net Assets Available for Plan
Benefits for Years Ended December 31, 1993
and December 31, 1992 . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 6-15
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Supplemental Schedules:
Schedule I - Item 27a--Schedule of Assets Held for
Investment Purposes as of December 31, 1993 and
December 31, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Schedule II - Item 27d--Schedule of Reportable
Transactions for the Year Ended December 31, 1993 . . . . . . . . . 18
Consent:
Independent Auditors' Consent (Exhibit 23). . . . . . . . . . . . . . 19
NOTE: Other schedules not included have been omitted as they
are not applicable.
<PAGE> 3
Deloitte &
Touche
Suite 2400
424 Church Street
Nashville, TN 37219-2396
(615) 259-1800
INDEPENDENT AUDITORS' REPORT
SAVINGS PLAN COMMITTEE
Service Merchandise Company, Inc.
Savings and Investment Plan
Nashville, Tennessee
We have audited the accompanying statements of net assets
available for Plan benefits of the Service Merchandise Company,
Inc. Savings and Investment Plan as of December 31, 1993 and
1992, and the related statement of changes in net assets
available for Plan benefits for the years then ended. These
financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for Plan benefits of the Service Merchandise Company,
Inc. Savings and Investment Plan as of December 31, 1993 and 1992
and the changes in its net assets available for Plan benefits for
the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules of (1) assets held for investment purposes
and (2) reportable transactions are presented for the purpose of
additional analysis and are not a required part of the basic
financial statements but are supplementary information required
by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act
of 1974. The fund information in the financial statements
referred to above is presented for purposes of additional
analysis rather than to present the net assets available for Plan
benefits and changes in net assets available for Plan benefits of
each fund. The supplemental schedules and fund information,
which are the responsibility of the Plan's management, have
been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken as
a whole.
/s/ DELOITTE & TOUCHE
______________________
DELOITTE & TOUCHE
June 17, 1994
Deloitte Touche
Tohmatsu
International
-3-
<PAGE> 4
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
December 31,
1993 1992
________________________
<S> <C> <C>
Assets:
Investments - current value
(cost: $59,769,414 and $50,792,573, respectively) $65,598,341 $66,712,157
Receivables:
Loans to employees 4,551,495 3,558,070
Employee contributions 178,818 439,329
Employer contributions 70,274 102,465
Dividends and interest 5,893 9,982
___________ ___________
Total assets 70,404,821 70,822,003
___________ ___________
Liabilities:
Payable to Plan participants 360,493 644,082
___________ __________
Total liabilities 360,493 644,082
___________ ___________
Net assets available for Plan benefits $70,044,328 $70,177,921
=========== ===========
See Notes to Financial Statements.
</TABLE>
-4-
<PAGE> 5
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
Year Ended
December 31,
1993 1992
_________________________
<S> <C> <C>
Net assets available for Plan benefits,
beginning of year $70,177,921 $46,176,269
___________ ___________
Additions:
Employee contributions 9,183,749 9,703,913
Employer contributions 3,606,001 3,848,566
Dividend and interest income 2,470,076 1,827,108
Trustee fees reimbursed by employer - 47,634
Net appreciation/(depreciation) in investments (8,009,618) 13,963,990
___________ ___________
Total additions 7,250,208 29,391,211
___________ ___________
Deductions:
Payments to Plan participants 7,383,801 5,341,925
Administrative expenses - 47,634
___________ ___________
Total deductions 7,383,801 5,389,559
___________ ___________
Net additions/(deductions) (133,593) 24,001,652
___________ ___________
Net assets available for Plan benefits,
end of year $70,044,328 $70,177,921
=========== ===========
See Notes to Financial Statements.
</TABLE>
-5-
<PAGE> 6
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 31, 1993 AND 1992
NOTE 1: DESCRIPTION OF THE PLAN
The Service Merchandise Company, Inc. Savings and Investment
Plan (the "Plan") is a qualified defined contribution plan,
under Section 401(a) and 401(k) of the Internal Revenue
Code, covering eligible associates of Service Merchandise
Company, Inc. (the "Company"). The Plan was created on July
1, 1983 and amended and restated February 6, 1991, effective
January 1, 1989. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974
("ERISA"), as amended.
The following description of the Plan provides only general
information. Participants should refer to the Plan
agreement for a more complete description of the Plan's
provisions.
Eligibility
-----------
All associates are eligible upon completing one year of
qualified service, as defined in the Plan agreement, and
reaching a minimum age of 21.
Contributions
-------------
Associates may contribute through salary deferral from 1% to
15% of their annual salary.
The Plan provides for a matching contribution to be made by
the Company based on the ratio of "net profit," as defined,
to net sales of the Company for the fiscal year
corresponding with the previous Plan year. "Net profit" is
defined as the Company's net profit 1) after deducting
contributions to the Company's pension plan, if any, 2)
excluding any additional interest and expenses attributable
to the Company's 1989 recapitalization, and 3) excluding the
provision for income taxes and any extraordinary items.
Net Profit as Percentage of
Sales for Fiscal Year
Corresponding with Previous Employer Match
Plan Year Percentage
-------------------------------- --------------
0% 0%
Greater than 0% but less than 1% 10%
1% or more but less than 2% 20%
2% or more but less than 3% 30%
3% or more but less than 4% 40%
4% or more 50%
The Company's matching contribution is limited to the first
6% of participant contributions. The Company matching
contribution was at the 50% level in 1993 and 1992.
-6-
page <7>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 31, 1993 AND 1992
Vesting
-------
Participants are immediately 100% vested in all associate
and Company contributions.
Participant Accounts
--------------------
Each participant's account is credited with the
participant's contribution and Company's matching
contribution. Plan earnings are allocated based on the
participant's pro-rata share of each investment fund.
Investment Options
------------------
Under the Plan, participants have a variety of investment
options available. Except for the Service Merchandise
Company, Inc. Common Stock Fund, the funds are proprietary
products of T. Rowe Price, the investment manager and Plan
trustee. Prior to April 1992, funds offering substantially
equivalent investment opportunities, except as noted below,
were available through the then investment manager and Plan
trustee of First American Trust Company, N.A.
Participants may invest their account, in minimum whole
increments of 1%, in any of the following investment
options:
Service Merchandise Company, Inc. Common Stock Fund:
consists exclusively of the Company's registered common
stock.
U.S. Treasury Fund (previously, Money Market
Securities): consists entirely of investments in United
States Treasury securities and other obligations
directly guaranteed by the U.S. Government.
New Income Fund (previously, Common Trust Fund - Bonds):
consists of investments in a variety of debt securities
such as corporate bonds, U.S. and Canadian Government
issues, certificates of deposit and commercial paper.
Equity Income Fund (previously, Common Trust Fund -
Stocks): consists of investments in corporate equity
securities.
Balanced Fund*: consists of 60% of investments in
equity securities of established companies and 40% in
U.S. Government and investment grade bonds.
Spectrum Growth Fund*: consists of investments in a
diversified group of domestic and international T. Rowe
Price funds which invest principally in equity
securities.
-7-
page <8>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 31, 1993 AND 1992
Capital Appreciation Fund*: consists of investments in
equity securities of established companies offering
above-average prospects for capital appreciation.
Guaranteed Investment Contracts**: consists of
investments in guaranteed investment contracts issued by
insurance companies. This fund was managed by
NationsBank of Tennessee.
* New fund in 1992.
** Fund eliminated in 1992.
Earnings from the funds, consisting primarily of interest
and dividends, are automatically reinvested in their
respective fund.
At December 31, 1993, there were a total of 7,591
participants in the Plan. Employee participation, by fund,
at December 31, 1993 was as follows:
Service Merchandise
Company, Inc.
Common Stock Fund 4,095
U.S. Treasury Fund 4,023
New Income Fund 2,725
Equity Income Fund 2,395
Capital Appreciation Fund 842
Balanced Fund 721
Spectrum Growth Fund 716
Payment of Benefits
-------------------
Upon termination of employment prior to retirement, all
participant balances less than $3,500 are distributed in a
lump-sum amount. Balances above $3,500 may, at the
participant's option, be distributed in a lump-sum or held
until retirement. As of December 31, 1993 and 1992, net
assets available for benefits included benefits of
$2,745,576 and $1,663,529, respectively, due to participants
who have withdrawn from participation in the Plan.
Upon retirement, the participant has the option of receiving
either a lump-sum distribution or a monthly payment over a
period of not less than five and not more than fifteen years.
Distributions upon the death of a participant shall be made
in a lump-sum amount.
Tax Effect on Participants
--------------------------
Participants' contributions, subject to certain regulatory
maximums, are in tax deferred dollars. Company matching
contributions and investment earnings allocated to
participants' accounts are not taxable to the participant
until the amounts are distributed from the Plan.
-8-
<PAGE> 9
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 31, 1993 AND 1992
NOTE 2: SUMMARY OF ACCOUNTING POLICIES
Method of Accounting
--------------------
The Plan's financial statements are prepared on the accrual
basis of accounting.
Reclassification
----------------
Certain amounts in the 1992 financial statements have been
reclassified to conform with the 1993 presentation.
Investments
-----------
Investments are valued based on quoted market prices as of
the last day of the Plan year. Guaranteed Investment
Contracts are valued at their contract value as of the last
day of the Plan year.
Net Appreciation (Depreciation) on Investments
----------------------------------------------
Net appreciation (depreciation) on investments includes both
realized and unrealized appreciation (depreciation).
<TABLE>
NOTE 3: SHARE OR UNIT VALUES
Units of each investment fund are allocated daily based on
changes in market valuation and participant contributions;
Company contributions are allocated quarterly. The market
value, per share or unit, by fund was as follows:
<CAPTION>
Fund December 31, 1992 March 31, 1993 June 30, 1993 September 30, 1993 December 31, 1993
____________________________________________________________________________________________________________________________________
Shares Shares Shares Shares Shares
or Market or Market or Market or Market or Market
Units Value Units Value Units Value Units Value Units Value
____________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Service
Merchandise
Company, Inc.
Common Stock
Fund 1,934,608 $14.50 2,035,952 $11.37 2,012,452 $11.37 2,047,049 $10.87 2,045,065 $10.00
New Income Fund 1,346,196 9.00 1,241,429 9.21 1,245,279 9.31 1,276,439 9.45 1,297,186 9.24
Equity Income
Fund 489,046 15.63 535,976 16.30 598,545 16.43 626,796 16.83 686,075 16.65
U.S. Treasury
Fund 16,759,038 1.00 16,433,502 1.00 16,233,965 1.00 16,000,702 1.00 16,101,525 1.00
Capital
Appreciation
Fund 87,163 11.39 101,865 11.90 122,093 12.23 143,159 12.55 165,708 12.66
Spectrum Growth
Fund 33,330 10.54 72,902 10.99 87,224 11.32 97,946 11.97 150,784 11.87
Balanced Fund 59,325 11.07 83,189 11.36 104,333 11.38 116,565 11.77 145,114 12.02
</TABLE>
-9-
<PAGE> 10
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 31, 1993 AND 1992
<TABLE>
NOTE 4: INVESTMENTS
The following table presents the fair values, as determined by
quoted market prices as of the last day of the Plan year, of the Plan's
investments:
<CAPTION>
December 31,1993 December 31,1992
_______________________________________________________________________
Number of Number of
Shares or Shares or
Units Units
of Current of Current
Description Participation Cost Value Participation Cost Value
___________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Service Merchandise
Company, Inc. Common
Stock Fund 2,045,065 $15,828,100 $20,450,647 1,934,608 $12,586,132 $28,051,820
Service Merchandise
Company, Inc. Common
Stock - Cash - - 5,085 - - 140,924
New Income Fund (previously,
Common Trust Fund - Bonds) 1,297,186 11,687,945 11,986,001 1,346,196 11,993,226 12,115,770
Equity Income Fund (previously,
Common Trust Fund - Stocks) 686,075 10,806,167 11,423,145 489,046 7,447,509 7,643,793
U.S. Treasury Fund (previously,
Money Market Securities) 16,101,525 16,101,525 16,101,525 16,759,038 16,759,038 16,759,038
Capital Appreciation Fund 165,708 1,980,798 2,097,858 87,163 1,012,804 992,789
Spectrum Growth Fund 150,784 1,716,401 1,789,808 33,330 350,669 351,299
Balanced Fund 145,114 1,648,478 1,744,272 59,325 643,195 656,724
___________ ___________ ___________ ___________
Total investments $59,769,414 $65,598,341 $50,792,573 $66,712,157
=========== =========== =========== ===========
</TABLE>
The allocation by investment fund, of net assets available
for benefits as of December 31, 1993 and 1992 and changes
in net assets available for benefits for the years ended
December 31, 1993 and 1992, are as follows on pages 11 through
14:
-10-
<PAGE> 11
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS
December 31, 1993
<CAPTION>
Service
Merchandise
Company, Inc. New U.S. Capital Spectrum
Common Stock Income Equity Treasury Appreciation Growth Balanced Employee
Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments -
current value $20,455,732 $11,986,001 $11,423,145 $16,101,525 $2,097,858 $1,789,808 $1,744,272 - $65,598,341
Receivables:
Loans to employees 9,793 5,848 5,614 10,185 935 950 941 $4,517,229 4,551,495
Employee
contributions 49,915 28,511 31,411 43,033 10,038 8,071 7,839 - 178,818
Employer
contributions 18,919 11,061 11,954 17,085 3,992 4,071 3,192 - 70,274
Dividends and
interest 1,801 935 964 1,690 133 197 173 - 5,893
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Total assets 20,536,160 12,032,356 11,473,088 16,173,518 2,112,956 1,803,097 1,756,417 4,517,229 70,404,821
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Liabilities:
Payable to Plan
participants 107,920 61,822 74,060 56,923 18,937 18,991 21,840 - 360,493
___________ ___________ ___________ __________ __________ __________ __________ __________ ___________
Total liabilities 107,920 61,822 74,060 56,923 18,937 18,991 21,840 - 360,493
___________ ___________ ___________ __________ __________ __________ __________ __________ ___________
Net assets available
for Plan benefits $20,428,240 $11,970,534 $11,399,028 $16,116,595 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328
=========== =========== =========== =========== ========== ========== ========== ========== ===========
</TABLE>
-11-
page <12>
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
ALLOCATION OF PLAN ASSETS AND LIABILITIES
TO INVESTMENT PROGRAMS
December 31, 1992
<CAPTION>
Service
Merchandise
Company, Inc. New U.S. Capital Spectrum
Common Stock Income Equity Treasury Appreciation Growth Balanced Employee
Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
____________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments -
current value $28,192,744 $12,115,770 $7,643,793 $16,759,038 $992,789 $351,299 $656,724 - $66,712,157
Receivables:
Loans to employees 13,839 9,763 6,402 17,152 1,232 321 512 $3,508,849 3,558,070
Employee
contributions 124,732 80,342 60,481 135,741 19,244 8,609 10,180 - 439,329
Employer
contributions 30,110 17,638 15,534 30,324 4,182 2,047 2,630 - 102,465
Dividends and
interest 3,033 1,838 1,369 3,323 232 94 93 - 9,982
___________ ___________ __________ ___________ _________ ________ ________ __________ ___________
Total assets 28,364,458 12,225,351 7,727,579 16,945,578 1,017,679 362,370 670,139 3,508,849 70,822,003
___________ ___________ __________ ___________ _________ ________ ________ __________ ___________
Liabilities:
Payable to Plan
participants 308,197 95,498 95,498 109,147 15,203 11,047 9,492 - 644,082
___________ ___________ __________ ___________ _________ ________ ________ __________ ___________
Total
liabilities 308,197 95,498 95,498 109,147 15,203 11,047 9,492 - 644,082
___________ ___________ __________ ___________ _________ ________ ________ __________ ___________
Net assets available
for Plan benefits $28,056,261 $12,129,853 $7,632,081 $16,836,431 $1,002,476 $351,323 $660,647 $3,508,849 $70,177,921
=========== =========== ========== =========== ========== ======== ======== ========== ===========
</TABLE>
-12-
<PAGE> 13
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO
INVESTMENT PROGRAMS
For the Year Ended December 31, 1993
<CAPTION>
Service
Merchandise
Company, Inc. New U.S. Capital Spectrum
Common Stock Income Equity Treasury Appreciation Growth Balanced Employee
Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
____________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available
for Plan benefits,
beginning of year $28,056,261 $12,129,853 $7,632,081 $16,836,431 $1,002,476 $351,323 $660,647 $3,508,849 $70,177,921
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Additions:
Employee
contributions 2,671,771 1,533,422 1,484,836 2,462,926 452,062 270,505 308,227 - 9,183,749
Employer
contributions 1,030,656 606,742 587,307 982,946 165,363 108,761 124,226 - 3,606,001
Dividend and
interest income 92,974 807,565 814,334 487,836 85,368 124,880 57,119 - 2,470,076
Net appreciation/
(depreciation)
in investment (9,198,749) 303,582 547,477 - 144,897 96,683 96,492 - (8,009,618)
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Total additions (5,403,348) 3,251,311 3,433,954 3,933,708 847,690 600,829 586,064 - 7,250,208
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Deductions:
Payments to Plan
participants 2,180,328 1,520,514 931,604 1,995,697 89,255 243,160 67,327 355,916 7,383,801
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Total deductions 2,180,328 1,520,514 931,604 1,995,697 89,255 243,160 67,327 355,916 7,383,801
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Net transfers
between funds 850,196 (1,363,714) 1,779,160 (1,619,041) 375,996 1,119,592 600,913 (1,743,102) -
Employee loans
processed (894,541) (526,402) (514,563) (1,038,806) (42,888) (44,478) (45,720) 3,107,398 -
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Net additions
(deductions) (7,628,021) (159,319) 3,766,947 (719,836) 1,091,543 1,432,783 1,073,930 1,008,380 (133,593)
___________ ___________ ___________ ___________ __________ __________ __________ __________ ___________
Net assets available
for Plan benefits,
end of year $20,428,240 $11,970,534 $11,399,028 $16,116,595 $2,094,019 $1,784,106 $1,734,577 $4,517,229 $70,044,328
=========== =========== =========== =========== ========== ========== ========== ========== ===========
</TABLE>
-13-
<PAGE> 14
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
ALLOCATION OF PLAN INCOME AND CHANGES IN PLAN EQUITY TO
INVESTMENT PROGRAMS
For the Year Ended December 31, 1992
<CAPTION>
Service
Merchan- Capital
dise
Company, New U.S. Appre- Spectrum
Inc.
Common Income Equity Treasury ciation Growth Balanced Employee
Stock
Fund Fund Fund GIC Fund Fund Fund Fund Loan Fund Total
____________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets
available for
Plan benefits,
beginning of year $12,021,754 $8,830,313 $4,754,747 $6,465,434 $10,668,171 - - - $3,435,850 $46,176,269
___________ __________ __________ __________ ___________ __________ ________ ________ __________ ___________
Additions:
Employee
contributions 2,634,294 1,863,828 1,233,959 528,515 2,969,414 $242,621 $109,956 $121,326 - 9,703,913
Employer
contributions 1,036,776 744,753 497,035 208,822 1,172,850 92,450 41,687 54,193 - 3,848,566
Dividend and
interest income 52,690 585,004 384,526 23,430 622,387 55,393 24,180 14,013 65,485 1,827,108
Administrative
expenses
reimbursed by
employer 40,616 - - 7,018 - - - - - 47,634
Net appreciation/
(depreciation)
in investments 13,721,072 102,475 48,312 191,789 (96,549) (19,173) 1,264 14,800 - 13,963,990
___________ __________ __________ __________ ___________ __________ ________ ________ __________ __________
Total additions 17,485,448 3,296,060 2,163,832 959,574 4,668,102 371,291 177,087 204,332 65,485 29,391,211
___________ __________ __________ __________ ___________ __________ ________ ________ __________ __________
Deductions:
Payments to Plan
participants 2,132,983 756,522 553,534 (13,537) 1,610,049 22,893 15,827 13,398 250,256 5,341,925
Trustee expenses 40,616 - - 7,018 - - - - - 47,634
___________ __________ __________ __________ ___________ __________ ________ ________ __________ __________
Total deductions 2,173,599 756,522 553,534 (6,519) 1,610,049 22,893 15,827 13,398 250,256 5,389,559
___________ __________ __________ __________ ___________ __________ ________ ________ __________ __________
Net transfers
between funds 1,420,280 1,282,861 1,525,136 (7,261,599) 4,355,796 667,355 196,232 472,512 (2,658,573) -
Employee loans
processed (697,622) (522,859) (258,100) (169,928) (1,245,589) (13,277) (6,169) (2,799) 2,916,343 -
___________ ___________ __________ __________ ___________ __________ ________ ________ __________ __________
Net additions
(deductions) 16,034,507 3,299,540 2,877,334 (6,465,434) 6,168,260 1,002,476 351,323 660,647 72,999 24,001,652
___________ ___________ __________ __________ ___________ __________ ________ ________ __________ __________
Net assets available
for Plan benefits,
end of year $28,056,261 $12,129,853 $7,632,081 - $16,836,431 $1,002,476 $351,323 $660,647 $3,508,849 $70,177,921
=========== =========== ========== ========== =========== ========== ======== ======== ========== ===========
</TABLE>
-14-
page <15>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 31, 1993 AND 1992
NOTE 5: LOANS TO PARTICIPANTS
Participants may borrow from their account balance after one
year of participation in the Plan. Outstanding loans cannot
exceed 50% of the participant's account balance and are
subject to a maximum of $50,000 and a minimum of $1,000.
Loans bear interest at 1% over the prime rate in effect at
loan origination, and repayment periods generally range from
one to five years. At December 31, 1993, 1,868 participants
had loans outstanding from the Plan.
NOTE 6: ADMINISTRATION OF THE PLAN
The Plan is administered by the Employee Benefit Plan
Committee appointed by the Company's Board of Directors.
Effective April 1, 1992, T. Rowe Price of Baltimore,
Maryland began serving as trustee and investment manager.
Prior to that date, the Plan trustee and investment manager
was First American Trust Company, N.A., of Nashville,
Tennessee. Currently, trustee fees are paid directly by the
Company. Prior to April 1992, trustee fees were paid by the
Plan and then reimbursed by the Company.
NOTE 7: PLAN TERMINATION
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject
to the provisions of ERISA. In the event of Plan
termination, Plan assets will be distributed, if
permissible, or transferred to participants in relation to
their account balances.
NOTE 8: INCOME TAXES
The Plan has received a determination letter indicating it
is qualified under Section 401(a) and meets the additional
requirements of Section 401(k) of the Internal Revenue Code.
The Plan is exempt from federal income tax under Section
501(a) of the Internal Revenue Code.
The Plan intends to apply for a determination letter with
regard to the Plan Amendment and Restatement and anticipates
a favorable ruling upon application.
NOTE 9: SUBSEQUENT EVENT
As of June 17, 1994, the market price of Service Merchandise
Company, Inc. common stock had declined to $7 per share from
a price of $10 per share at December 31, 1993. As of
December 31, 1993, approximately 31.2% of the Plan's net
assets were invested, at the participants' direction as
discussed in Note 1, in Service Merchandise Company, Inc.
common stock.
-15-
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Committee has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
June 27, 1994 By: /s/ S. Cusano
_____________
S. Cusano
Benefits Committee Chairman
June 27, 1994 By: /s/ Glen A. Bodzy
_________________
Glen A. Bodzy
June 27, 1994 By: /s/ Raymond Zimmerman
_____________________
Raymond Zimmerman
-16-
<PAGE> 17
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
SCHEDULE I - ITEM 27A--
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
<CAPTION>
December 31, December 31,
1993 1992
________________________________________________________________________________________
Number of Number of
Shares or Units Current Shares or Units Current
Description of Participation Cost Value of Participation Cost Value
_________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Service Merchandise
Company, Inc. Common
Stock Fund 2,045,065 $15,828,100 $20,450,647 1,934,608 $12,586,132 $28,051,820
Service Merchandise
Company, Inc. Common
Stock Fund - Cash - - 5,085 - - 140,924
New Income Fund (previously,
Common Trust Fund - Bonds) 1,297,186 11,687,945 11,986,001 1,346,196 11,993,226 12,115,770
Equity Income Fund (previously,
Common Trust Fund - Stocks) 686,075 10,806,167 11,423,145 489,046 7,447,509 7,643,793
U.S. Treasury Fund (previously,
Money Market Securities) 16,101,525 16,101,525 16,101,525 16,759,038 16,759,038 16,759,038
Capital Appreciation Fund 165,708 1,980,798 2,097,858 87,163 1,012,804 992,789
Spectrum Growth Fund 150,784 1,716,401 1,789,808 33,330 350,669 351,299
Balanced Fund 145,114 1,648,478 1,744,272 59,325 643,195 656,724
___________ ___________ ___________ ___________
Total investments $59,769,414 $65,598,341 $50,792,573 $66,712,157
=========== =========== =========== ===========
Loans to participants $4,551,495 $3,558,070
========== ==========
</TABLE>
-17-
<PAGE> 18
<TABLE>
SERVICE MERCHANDISE COMPANY, INC.
SAVINGS AND INVESTMENT PLAN
SCHEDULE II - ITEM 27D--
SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1993
<CAPTION>
Expense
Incurred
Total Total with Current
Purchase Selling Lease Trans- Cost of Value of Net
Identity of Party Description of Transactions Price Price Rental action Assets Assets Gain
____________________________________________________________________________________________________________________________
Series of transactions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Service Merchandise 190 purchases of $6,693,884 $6,693,884 - - - - $6,693,884 -
Company, Inc. and 205 sales of $4,828,283 - $4,828,283 - - $3,183,710 4,828,283 $1,644,573
Common Stock
Fund
U.S. Treasury 230 purchases of $5,475,132 5,475,132 - - - - 5,475,132 -
Fund and 241 sales of $6,132,646 - 6,132,646 - - 6,132,646 6,132,646 -
Equity Income 199 purchases of $5,411,181 5,411,181 - - - - 5,411,181 -
Fund and 184 sales of $2,179,306 - 2,179,306 - - 2,052,522 2,179,306 126,784
New Income 217 purchases of $3,768,473 3,768,473 - - - - 3,768,473 -
Fund and 214 sales of $4,207,068 - 4,207,068 - - 4,073,756 4,207,068 133,312
</TABLE>
-18-
<PAGE> 19
Deloitte & EXHIBIT 23
Touche
Suite 2400
424 Church Street
Nashville, TN 37219-2396
(615) 259-1800
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement No. 33-50185 of Service Merchandise Company, Inc. on Form S-8
of our report dated June 17, 1994, appearing in this
Annual Report on Form 11-K of the Service Merchandise Company, Inc.
Savings and Investment Plan for the year ended December 31, 1993.
/s/ DELOITTE & TOUCHE
- - ---------------------
DELOITTE & TOUCHE
June 27, 1994
Deloitte Touche
Tohmatsu
International
-19-
