SERVICE MERCHANDISE CO INC
8-K, 2000-06-26
MISC GENERAL MERCHANDISE STORES
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 8-K


                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                           Date of Report: May 1, 2000



                        SERVICE MERCHANDISE COMPANY, INC.
                   (Debtor-in-Possession as of March 27, 1999)
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Tennessee                     1-9223                   62-0816060
----------------------------     ------------------------     ----------------
(State or other jurisdiction     (Commission File Number)     (I.R.S. Employer
      of incorporation)                                      Identification No.)


7100 Service Merchandise Boulevard, Brentwood, TN                     37027
-----------------------------------------------------              -----------
    (Address of principal executive offices)                        (Zip Code)



       Registrant's telephone number, including area code: (615) 660-6000

                                 Not Applicable
--------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)



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Item 5.  Other Events

         Service Merchandise Company, Inc. (the "Company") has filed its monthly
operating report for the period commencing May 1, 2000 and ending May 28, 2000
(the "Operating Report") with the United States Bankruptcy Court for the Middle
District of Tennessee, a copy of which is attached hereto as Exhibit 99, in
connection with its voluntary petitions for reorganization under Chapter 11 of
title 11 of the United States Bankruptcy Code in Case No. 399-02649.

         The Company cautions readers not to place undue reliance upon the
information contained therein. The Operating Report contains unaudited
information, and is in a format, prescribed by the applicable bankruptcy laws.
There can be no assurance that the Operating Report is complete. The Operating
Report also contains information for periods which may be shorter or otherwise
different from those contained in the Company's reports pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such
information may not be indicative of the Company's financial condition or
operating results for the periods reflected in the Company's financial
statements or in its reports pursuant to the Exchange Act and readers are
cautioned to refer to the Exchange Act filings. Moreover, the Operating Report
and other communications from the Company may include forward-looking statements
subject to various assumptions regarding the Company's operating performance
that may not be realized and are subject to significant business, economic and
competitive uncertainties and contingencies, including those described in this
report, many of which are beyond the Company's control. Consequently such
matters should not be regarded as a representation or warranty by the Company
that such matters will be realized or are indicative of the Company's financial
condition or operating results for future periods or the periods covered in the
Company's reports pursuant to the Exchange Act. Actual results for such periods
may differ materially from the information contained in the Operating Report and
the Company undertakes no obligation to update or revise such Operating Report.

         The Operating Report includes a Rolling Revised Cash Flow Forecast
which is a forward-looking statement subject to various assumptions regarding
the Company's business, operating performance and other factors including
revenues, expenses, asset dispositions, trade terms and capital expenditures,
and various risks and uncertainties including those set forth below. This
information should be read in conjunction with the Company's reports filed
pursuant to the Exchange Act. Readers are cautioned that such information is
being reported publicly because it is being distributed to a large number of the
Company's vendors for purposes of their credit analyses. The Company undertakes
no obligation to update such information or to disclose similar information in
future Operating Reports. The Rolling Revised Cash Flow Forecast was not
examined, reviewed or compiled by the Company's independent public accountants.
The Rolling Revised Cash Flow Forecast is subject to future adjustments, if any,
that could materially affect such information.


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         The Company's liquidity, capital resources and results of operations
are subject to a number of risks and uncertainties, including, but not limited
to, the following: approval of plans and activities by the Bankruptcy Court,
including the Company's proposed strategic real estate initiatives; the ability
of the Company to continue as a going concern; the ability of the Company to
operate pursuant to the terms of the DIP to Exit Facility; the ability of the
Company to conduct successful clearance sales in connection with the 2000
Business Plan; the ability of the Company to sublease successfully portions of
its real estate in connection with the 2000 Business Plan; the ability of the
Company to complete its store refurbishment program within cost and time
expectations; the successful implementation of the consolidation of its
distribution centers; the ability of the Company to enter into satisfactory
arrangements with third parties with respect to real estate and Internet-related
strategies; risks associated with third parties seeking and obtaining Court
action to terminate or shorten the exclusivity period; the time for the Company
to accept or reject executory contracts including its store leases, and for
appointment of a Chapter 11 operating trustee or to convert the Company's
reorganization cases to liquidation cases; the ability of the Company to operate
successfully under a Chapter 11 proceeding, achieve planned sales and margin,
and create and have approved a plan of reorganization in the Chapter 11 cases;
potential adverse developments with respect to the Company's liquidity or
results of operations; the ability of the Company to obtain shipments, negotiate
and maintain terms with vendors and service providers for current orders; the
ability to fund and execute a Year 2000 Business Plan; the ability of the
Company to achieve cost savings; the ability of the Company to attract, retain
and compensate key executives and associates, competitive pressures from other
retailers, including specialty retailers and discount stores, which may affect
the nature and viability of the Company's business strategy; trends in the
economy as a whole which may affect consumer confidence and consumer demand for
the types of goods sold by the Company; the seasonal nature of the Company's
business and the ability of the Company to predict consumer demand as a whole,
as well as demand for specific goods; the ability of the Company to attract and
retain customers; potential adverse publicity; real estate occupancy and
development costs, including the substantial fixed investment costs associated
with opening, maintaining or closing a Company store; uncertainties with respect
to continued public trading in the Company's securities; the ability to effect
conversions to new technological systems; and the ability to develop, prosecute,
confirm and consummate one or more plans of reorganization with respect to its
Chapter 11 cases.

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                                   SIGNATURES

         Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.


                                    SERVICE MERCHANDISE COMPANY, INC.



Date: June 23, 2000                 By: /s/ C. Steven Moore
                                        ----------------------------------------
                                        C. Steven Moore
                                        Senior Vice President, Chief
                                        Administrative Officer, Secretary and
                                        General Counsel






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                                  EXHIBIT INDEX

  No.                                Exhibit
--------        ----------------------------------------------------------------
   99           Operating Report for the period ending May 28, 2000






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