Remembering Service Merchandise

Tuesday, July 26, 2011 - by Harmon Jolley

Retail businesses often have similar histories. They start small, often in a tiny storefront. As they grow, they may move into a shopping center. After many years of being in business, they may falter as newer competitors take their customers. Rarely do they go through those phases and then make a comeback, but one store name of Chattanooga’s past did – Service Merchandise.

Service Merchandise was established in 1934 by Harold and Mary Zimmerman in Pulaski, Tennessee. Its first catalog showroom opened in 1960 in downtown Nashville, followed by a store in Memphis in 1967 and Madison the following year.

The retail chain entered the Chattanooga market in 1969. The May 25, 1969 Chattanooga Times reported that the retailer would be moving into the former Mulkey & Jackson (M&J) Supermarket at 3506 Brainerd Road at Germantown. Larry Stephens and Farouk Fouad were named manager and assistant manager respectively.

Service Merchandise coupled a catalog business with its stores, and planned to stock as many as 15,000 items. A computer inventory system linked catalog orders, store sales, and a central warehouse/distribution system.

Customers often shopped for wedding gifts at Service Merchandise. The store carried a variety of small appliances, clocks, jewelry, and musical items.

In a May 28, 1969 Chattanooga Post interview, manager Larry Stephens noted the importance of brand names to Service Merchandise. “These names are well-advertised from old, reliable manufacturers. “Their products are dependable and usually trouble-free,” said Mr. Stephens.

On November 17, 1970, the retailer moved to a larger facility in Brainerd Village. The Chattanooga Times interviewed founder Harry Zimmerman, who said that the new store was not only the largest of its seven stores, but also the first to be located in a shopping center.

Mayor Austin Letheridge “Chunk” Bender officiated at the ribbon-cutting for the new store. Prizes including diamond rings were given away. An 8-track tape player could be purchased for $84.97; one might buy the Beatles’ last album “Let it Be” along with it. A GAF movie kit cost $67.88, and a Corsair typewriter was $28.88. One need not go out with wet hair – a Dominion portable hair dryer was $9.79.

In 1985, Service Merchandise made plans for a north river store in Hixson. The February 28, 1985 Chattanooga News-Free Press told of negotiations between Service Merchandise and The Leader for a free-standing building opened in 1982 behind the Northgate library. The Leader was relocating inside Northgate Mall.

I recall that Service Merchandise controlled its losses due to shoplifting by an unusual method. Customers roamed the store with a small order form, on which they rote the item number of an intended purchase. They completed their shopping odyssey by taking the form to a clerk at the back of the store, where the item(s) were delivered. We purchased a Three Stooges cookie jar by this method – nyuk, nyuk, nyuk as Curly would say.

The new Hamilton Crossing shopping complex gained a Service Merchandise store in May, 1988. Service and Sears, Roebuck and Company opened in the same month.

By the late 1980’s, Service Merchandise was facing new competition from Circuit City, Target, and Wal-Mart. It began pursuing several restructuring plans, which included discontinuing unprofitable merchandise, closing stores, and moving into Internet-based catalog orders. That wasn’t enough, however, and the chain filed for Chapter 11 bankruptcy in 1999. Dissolution of the company followed in 2002.

Service Merchandise rose from the retail ashes in 2004, when Raymond Zimmerman bought the name and logo at auction. Today, it continues as a Web-only retail business.

If you have memories of Service Merchandise, please send me an e-mail at jolleyh@bellsouth.net.


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