DATE: Saturday, March 29, 1997              TAG: 9703290294

SECTION: BUSINESS                PAGE: D2   EDITION: FINAL 

SOURCE: STAFF AND WIRE REPORT 

                                            LENGTH:   33 lines

SERVICE MERCHANDISE DOESN'T PLAN TO CLOSE VIRGINIA STORES

Service Merchandise Co. said it will not be closing any of its Virginia stores any time soon.

The Nashville-based catalog-showroom chain announced plans earlier this week to shutter 60 stores and a distribution center and cut 3,300 full- and part-time jobs - mostly on the West Coast.

In this region, Service Merchandise owns stores on Portsmouth Boulevard in Chesapeake, Lynnhaven Shopping Center in Virginia Beach and Mercury Boulevard in Hampton.

``We expect the closings to be a one-time announcement,'' said company spokesman Craig Winnett. ``We do not expect any more waves of closings.

``But at the same time, any business has to review its operations from time to time.''

The closings, part of a companywide restructuring, will bring the number of Service Merchandise stores to 339.

The restructuring is designed to boost returns to shareholders, the company said. The closings are expected to result in a charge of about $80 million in the fiscal first quarter and perhaps another $29 million later.

Analysts point to the catalog-showroom category's waning fortunes over the years as competition has sprouted up in all sorts of places - from electronics and appliance specialists like Circuit City to discount juggernauts like Wal-Mart.

Last year for instance, catalog-showroom retailer Best Products filed for bankruptcy and closed a number of stores in the West before going belly-up months later.

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