<ARTICLE>                     5
<LEGEND>
This schedule contains summary financial  information extracted from the Service
Merchandise Company,  Inc. Form 10-Q for the six periods ended June 28, 1998 and
is qualified in its entirety by reference to such financial  statements detailed
in Part I of the Form 10-Q.
</LEGEND>
<MULTIPLIER>                                   1,000
<CURRENCY>                                     $
       
                                            
<PERIOD-TYPE>                                  6-MOS
<FISCAL-YEAR-END>                              JAN-03-1999
<PERIOD-START>                                 DEC-28-1997
<PERIOD-END>                                   JUN-28-1998
<EXCHANGE-RATE>                                          1
<CASH>                                             142,101
<SECURITIES>                                             0
<RECEIVABLES>                                       46,846
<ALLOWANCES>                                         2,096
<INVENTORY>                                        862,997
<CURRENT-ASSETS>                                 1,093,436
<PP&E>                                           1,101,250
<DEPRECIATION>                                     599,781
<TOTAL-ASSETS>                                   1,645,397
<CURRENT-LIABILITIES>                              538,487
<BONDS>                                            749,244       
<PREFERRED-MANDATORY>                                    0
<PREFERRED>                                              0
<COMMON>                                           100,396<F1>
<OTHER-SE>                                         256,151
<TOTAL-LIABILITY-AND-EQUITY>                     1,645,397
<SALES>                                          1,279,294
<TOTAL-REVENUES>                                 1,279,294
<CGS>                                              972,629
<TOTAL-COSTS>                                      972,629
<OTHER-EXPENSES>                                   316,249<F2>
<LOSS-PROVISION>                                         0
<INTEREST-EXPENSE>                                  39,116
<INCOME-PRETAX>                                    (48,700)
<INCOME-TAX>                                       (18,262)
<INCOME-CONTINUING>                                (30,438)
<DISCONTINUED>                                           0
<EXTRAORDINARY>                                          0
<CHANGES>                                                0
<NET-INCOME>                                       (30,438)
<EPS-PRIMARY>                                        (0.31)
<EPS-DILUTED>                                        (0.31)
<FN>
<F1>AMOUNT REPRESENTS THE NUMBER OF SHARES OF $0.50 PAR VALUE COMMON STOCK
    ISSUED AND OUTSTANDING.
<F2>AMOUNT INCLUDES I) DEPRECIATION AND AMORTIZATION AND II) SELLING, GENERAL
    AND ADMINISTRATIVE EXPENSES. 
</FN>