<ARTICLE>                     5
<LEGEND>
This schedule contains summary financial  information extracted from the Service
Merchandise Company,  Inc. Form 10-Q for the nine periods ended September 27, 
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>                                  9-MOS
<FISCAL-YEAR-END>                              JAN-03-1999
<PERIOD-START>                                 DEC-28-1997
<PERIOD-END>                                   SEP-27-1998
<EXCHANGE-RATE>                                          1
<CASH>                                              54,452
<SECURITIES>                                             0
<RECEIVABLES>                                       50,911
<ALLOWANCES>                                         2,144
<INVENTORY>                                      1,044,170
<CURRENT-ASSETS>                                 1,215,460
<PP&E>                                           1,116,813
<DEPRECIATION>                                     612,030
<TOTAL-ASSETS>                                   1,779,448
<CURRENT-LIABILITIES>                              729,322
<BONDS>                                            728,903       
<PREFERRED-MANDATORY>                                    0
<PREFERRED>                                              0
<COMMON>                                           100,356<F1>
<OTHER-SE>                                         218,211
<TOTAL-LIABILITY-AND-EQUITY>                     1,779,448
<SALES>                                          1,884,281
<TOTAL-REVENUES>                                 1,884,281
<CGS>                                            1,439,362
<TOTAL-COSTS>                                    1,439,362
<OTHER-EXPENSES>                                   507,230<F2>
<LOSS-PROVISION>                                         0
<INTEREST-EXPENSE>                                  58,467
<INCOME-PRETAX>                                   (109,658)
<INCOME-TAX>                                       (41,122)
<INCOME-CONTINUING>                                (68,536)
<DISCONTINUED>                                           0
<EXTRAORDINARY>                                          0
<CHANGES>                                                0
<NET-INCOME>                                       (68,536)
<EPS-PRIMARY>                                        (0.69)
<EPS-DILUTED>                                        (0.69)
<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>