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EXHIBIT 99
[ Company Logo ]
Service Merchandise Company, Inc.
2001 Business Plan
April 9, 2001
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FOREWORD
REFINE AND EMERGE
In 2000, Service Merchandise Company Inc. ("Service Merchandise" or the
"Company") was successful on many fronts, including surpassing our continuing
EBITDAR Target of $41.0 million and achieving continuing EBITDAR of $44.9
million. This result is 9.3% better than our 2000 plan, 78.1% better than our
1999 results and was accomplished while maintaining strong liquidity that ranged
from $146 million to a peak of $343 million. As everyone in the retail industry
knows, 2000 ended with an extremely challenging second half, particularly the
holiday season. When considering the difficult retail economy, together with the
major initiatives undertaken by the Company in 2000 (exiting unprofitable
hardlines merchandise categories and clearing approximately $189 million in
inventory, reconfiguring all 218 on-going stores, 73 of which involved full
refurbishments, and significantly downsizing our overhead structure), we are
particularly proud of our accomplishments.
Because the retail economy is expected to remain difficult at least
through the first half of the year, we are presenting two EBITDAR goals in 2001:
a Target goal and a Threshold goal. The continuing Target EBITDAR goal is $75
million and reflects the level at which we believe the Company should perform in
a more normalized economy. The continuing Threshold EBITDAR goal is $60 million
and reflects the level at which we believe the Company is more likely to perform
if the retail economy, as projected, remains weak in the first half of the year
and partially recovers in the second half.
The economy and the general retail environment have also caused us to
adjust our Chapter 11 emergence timetable. We believe that, in light of the
economy and the weakening capital markets, it is prudent to operate under court
supervision through Christmas 2001. We are very fortunate to have an adequate
debtor-in-possession ("DIP") to exit credit facility led by Fleet Retail Finance
that not only affords us ample liquidity, but also provides the ability to
convert the facility to an exit financing facility upon emergence from Chapter
11 with a maturity date of April 2004.
We now plan to emerge from Chapter 11 after the 2001 Christmas season.
At the February 2001 Omnibus hearing, the bankruptcy court granted the Company
an extension of the exclusive right to present a plan of reorganization through
January 31, 2002 and the right to solicit acceptances of the plan to April 1,
2002. We look forward to working with all of our constituents to make 2001
successful and emerging from bankruptcy reorganization in 2002.
THE SENIOR EXECUTIVES OF SERVICE MERCHANDISE COMPANY, INC.
/s/ S. Cusano
- --------------------------------------------------------------------------------
S. Cusano
Chairman of the Board, Chief Executive Officer and President
/s/ C. Steven Moore /s/ Michael E. Hogrefe
- --------------------------------------- -------------------------------
C. Steven Moore Michael E. Hogrefe
Chief Administrative Officer and Senior Vice President and
General Counsel Chief Financial Officer
/s/ Jerry E. Foreman /s/ Jana Pistole /s/ Eric A. Kovats
- --------------------------------------- ------------------------------- --------------------------------
Jerry E. Foreman Jana Pistole Eric A. Kovats
Senior Vice President - Home, Jewelry Merchandising Senior Vice President - Sales
Logistics and eCommerce
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SERVICE MERCHANDISE COMPANY, INC.
DIRECTORS AND OFFICERS
DIRECTORS
S. Cusano Chairman of the Board, Chief Executive Officer and President
Raymond Zimmerman Former Chairman of the Board
Richard P. Crane, Jr. Attorney at Law, Musick, Peeler & Garrett, Los Angeles, California
P. Maynard Holt, J.D. Business Consulting, Nashville, Tennessee
Charles V. Moore President of Trainer, Wortham & Company, Inc., Investment Counselors, NY, NY
Harold Roitenberg President of Roitenberg Investments, Inc., Minneapolis, Minnesota
EXECUTIVE OFFICERS
S. Cusano Chairman of the Board, Chief Executive Officer and President
C. Steven Moore Chief Administrative Officer and General Counsel
Michael E. Hogrefe Senior Vice President and Chief Financial Officer
Jerry E. Foreman Senior Vice President - Home, Logistics and eCommerce
Eric A. Kovats Senior Vice President - Sales
CORPORATE INFORMATION
SALES SUPPORT CENTER TRUSTEE AND PAYING AGENT - 8 3/8%
SENIOR NOTES, DUE 2001
Service Merchandise Company, Inc.
7100 Service Merchandise Drive State Street Bank and Trust
Brentwood, Tennessee 37027 Corporate Services Division, P. O. Box 778
(615) 660-6000 Boston, Massachusetts 02102-0778
(800) 531-0368
MAILING ADDRESS
TRUSTEE AND PAYING AGENT - 9%
P.O. Box 24600 SENIOR SUBORDINATED DEBENTURES, DUE 2004
Nashville, Tennessee 37202-4600
The Bank of New York
INDEPENDENT AUDITORS 101 Barclay Street
New York, New York 10286
Deloitte & Touche LLP (212) 815-5287
424 Church Street, Suite 2400
Nashville, Tennessee 37219-2396
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This business plan includes certain forward-looking statements (any
statement other than those made solely with respect to historical fact) based
upon management's beliefs, as well as assumptions made by and data currently
available to management. This information has been, or in the future may be,
included in reliance on the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on a
variety of assumptions that may not be realized and are subject to significant
business, economic, judicial and competitive uncertainties and potential
contingencies, including those set forth below, many of which are beyond the
Company's control. Actual results may differ materially from those anticipated
in any such forward-looking statements. The Company undertakes no obligation to
update or revise any such forward-looking statements, or to otherwise revise or
update this 2001 Business Plan. Please see "Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995" on page 21.
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TABLE OF CONTENTS
I. INTRODUCTION................................................................................................ 1
II. 2000 PERFORMANCE SUMMARY.................................................................................... 6
III. 2001 BUSINESS PLAN INITIATIVES
Jewelry.............................................................................................. 11
Home................................................................................................. 12
Marketing............................................................................................ 13
Store/Field Organization............................................................................ 14
Real Estate.......................................................................................... 16
Capital Structure/Liquidity.......................................................................... 17
Other................................................................................................ 18
IV. CONCLUSION.................................................................................................. 20
SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995......................................................... 21
APPENDICES
A. Senior Management Structure and Single Store Structure
B. Store Locations
C. Store Renovation Summary
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I. INTRODUCTION
When we began the restructuring of Service Merchandise in March of
1999, we stated that our goal was first to stabilize the business and then
strengthen and position it for ultimate growth. By the end of 1999, only nine
months after the initial filing for Chapter 11 protection, we had stopped the
negative trend of our business for the first time in seven years and surpassed
our net continuing Target EBITDAR by $13 million. Thus, we were ready to begin
in 2000 the process of strengthening the business for ultimate growth, and
toward that end we embarked on a series of initiatives designed to reposition
Service Merchandise as a jewelry and home goods specialty retailer. Those
initiatives were aggressive and challenging, especially in the retail
environment that developed in the second half of 2000. Yet despite those
challenges, we again surpassed our net continuing Target EBITDAR by almost $4
million, achieving a continuing Target EBITDAR of $44.9 million. The following
chart shows the Company's continuing EBITDAR progress from 1998 through 2000 ($
in thousands).
[CHART]
FISCAL 1998 FISCAL 1999 FISCAL 2000
- ----------- ----------- -----------
19,568 25,193 44,875
Although we surpassed our financial goals in 2000, the path to that
success was not exactly the path that we had planned. We planned for the
substantial changes that occurred in our business model, but we did not
anticipate the challenging retail economy that we faced in the second half of
2000 or the more than $3 billion of inventory and real estate holdings being
liquidated by failed retailers in the first half of 2001. Retail sales
throughout the industry began to decline in the second half of 2000 and
culminated with a holiday season that saw the lowest increase in sales since
1995. Fortunately, we were able to manage our expense base, our margin rates and
our inventory levels in a manner that still enabled us to exceed our planned
financial goals for continuing EBITDAR.
As in 1999, much was learned and reinforced in 2000 regarding the
opportunities that the coming year presents. We believe that our customer wants
and expects value pricing, large assortments and quality merchandise. We believe
that our jewelry customer is loyal and continues to be the core of our business,
allowing us to sell more jewelry per store front than any other jewelry
retailer. We believe that our home merchandise business, while undergoing
substantial change in 2000, can contribute significantly to the business if we
continue to manage margin rates and inventories aggressively. We believe that
our marketing is more effective with
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less emphasis on branding and more emphasis on value at lower price points. We
believe that we need to better integrate the home merchandise offerings with the
jewelry business and increase cross-shop transactions. We also believe that we
need to refine the presentation of merchandise in our stores and bring more
focus to driving key items in both jewelry and home merchandise that our
customers have consistently shown a propensity to purchase.
With these opportunities, however, come unique challenges. The economy
is indisputably weaker than it was this time last year, and according to current
projections, it will continue to be weak throughout at least the first half of
the year. 2001 has already seen several new retail bankruptcy filings, capital
markets weakening and reports of store closings and job layoffs. However, even
with these economic conditions, we believe that the strategic direction of the
Company is the right one and our 2001 performance will enable us to emerge from
bankruptcy reorganization in early 2002.
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2000 SUCCESS
We believe the changes made to the business in 2000 were substantial
and directionally correct and did in fact accomplish the goal of strengthening
the business and repositioning Service Merchandise as a jewelry and home
specialty retailer. However, not all of the implemented initiatives produced the
anticipated results. Initiatives such as the higher-end jewelry, or gallery,
merchandise offering and the marketing effort of branding were still valuable
learning experiences that we will use to enhance our 2001 business plan.
The repositioning of the Company in 2000 began with the decision to
exit certain hardline merchandise categories (electronics, toys and fitness)
that, while a strong part of Service Merchandise's past, were unprofitable.
Knowing that significant space would be made available by exiting these
unprofitable categories, the Company began in March the process of downsizing
its stores from 50,000 square feet to approximately 25,000 square feet. This
downsizing required tremendous planning and coordination in order for the
Company to continuously operate its stores, even during the disruptive
construction and remodeling process. By the end of 2000, the Company had
reconfigured all of its 218 on-going stores to the new 25,000 square foot
format, including 73 stores that received complete refurbishments. These 73
locations emphasized the Company's strong jewelry franchise by expanding the
space allocated to jewelry and introducing the gallery concept in a limited
number of stores.
This repositioning of the retail concept provided an opportunity for
the Company to begin to unlock the value embedded in its real estate portfolio.
In addition to the substantial number of properties that the Company owns, it
also has long-term leases on many of its properties at rental rates that are
generally lower than can be obtained in today's market. Accordingly, the Company
began in March to offer for sublease the excess space in its stores created by
exiting unprofitable categories of merchandise. Through February 2001, the
program has resulted in 45 sublease transactions being approved by the
Bankruptcy Court that will generate $11.4 million in annualized income.
The significant progress made by the Company in 2000, like 1999, is due
to the support we received from our key constituents, including our vendors, our
lenders, our landlords and our other creditors. As of December 31, 2000, Service
Merchandise's accounts payable totaled $48.6 million, with 85% of the Company's
merchandise orders purchased on terms. The support of our vendors, together with
the support of the DIP facility banks, enabled us to enjoy significant liquidity
during the year. Finally, it goes without saying that Service Merchandise's
associates are its greatest resource. The achievements of 2000 would not have
been possible without the dedication and hard work of all our associates. We
thank them for their efforts and dedication to their jobs and Service
Merchandise.
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2001 BUSINESS PLAN SUMMARY
Although the Company exceeded its financial targets in both 1999 and
2000, and continues to benefit from strong liquidity through its DIP credit
facility, we believe it is appropriate to continue reorganization under Chapter
11 through 2001. The weak retail environment that is expected to continue
through at least the spring and summer, as well as conditions in the capital
markets, lead us to believe that negotiating a consensual reorganization plan
with our Creditors' Committee this fall and seeking to exit Chapter 11 following
the 2001 holiday season is the most prudent means of strengthening our business
and preparing it for long-term growth.
The process of developing our 2001 Business Plan began with a careful
evaluation of performance in 2000. Based on these considerations, Service
Merchandise has developed a 2001 Business Plan that features the following
initiatives:
- The Company will focus on its core competency in jewelry while
continuing to refine its home assortments. The Company
anticipates hiring a new merchant in 2001 to lead Service
Merchandise's efforts to provide a consistent and effectively
presented and communicated product offering.
- The Company will continue its efforts to create a sales
environment in its stores by training its store associates to
be "in-store merchants." The Sales Organization (stores) will
work closely with the merchandising departments to develop
compelling in-store presentations and signage that will help
the merchandise sell itself.
- The Company will refine its jewelry merchandising strategy by
rationalizing its assortment, bringing its trade-in program in
line with industry best practices and putting the gallery
merchandise in-line as opposed to in a special display.
- The Company is developing a new key item program (called
Service Select(TM)) where Service Merchandise's best selling
and most profitable merchandise in both jewelry and home will
be emphasized. Marketing and in-store initiatives will be
geared towards this new program.
- The Company's marketing and advertising will emphasize
quality, value and assortment with less emphasis on branding.
- The subleasing program will be aligned with the store remodel
program; thus as a rule, stores will be remodeled when they
have been subleased.
- The Company will further rightsize its stores organization,
consolidate the space at its sales support center
(headquarters), and reconfigure its jewelry repair
organization. The Company's corporate staffing levels and
overall expense structure will also be reduced. Approximately
1,750 full time positions, including 1,630 positions in the
stores and field
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organization and approximately 120 positions at the sales support
center, have already been eliminated. The expense reductions are
expected to generate $35 million in annual savings, in addition to the
$17 million in savings already built into our 2001 plan last year.
In light of the current weak retail environment, the Company has
developed two separate financial forecasts. The Company's Target EBITDAR goal
represents the level at which we believe the Company should perform under
"normal" economic conditions. The Threshold Plan represents the level at which
we believe the Company should perform based on current weak economic conditions.
Both the Target and Threshold goals represent significant improvement over 2000
performance.
The Company is fortunate that terms for funding for the 2001 Business
Plan, as well as future operations following our anticipated emergence from
Chapter 11 in 2002, are already in place. The Company will maintain the
four-year, $600 million DIP to exit credit facility obtained in 2000. This
facility not only provides financing during Chapter 11 but also provides exit
financing for ongoing capital improvements, operating expenses and general
working capital once the Company emerges from Chapter 11. See "Safe Harbor
Statement under the Private Securities Litigation Reform Act of 1995."
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II. 2000 PERFORMANCE SUMMARY
As noted above, the starting point in the development of the 2001
Business Plan was a careful review of 2000 performance. Accordingly, it is first
important to understand the particular aspects of 2000 performance prior to
reviewing the 2001 Business Plan. The information included herein should be
considered together with the Company's Annual Report on Form 10-K, including the
audited financial statements and related notes included therein.
FINANCIAL PERFORMANCE
On the strength of its strategic initiatives, Service Merchandise
posted operating results for 2000 that exceeded the 2000 Business Plan for
continuing operations.
CONTINUING OPERATIONS
FISCAL 1999 FISCAL 2000
($ millions) ACTUAL BUSINESS ACTUAL
-------- -------- --------
RESULTS PLAN RESULTS
-------- -------- --------
Net sales* $1,969.3 $1,422.6 $1,368.9
Gross margin-in $ 662.1 $ 556.6 $ 546.5
Gross margin-out $ 500.1 $ 421.0 $ 407.9
Sales, general and administrative expenses
Employment 302.4 231.9 225.5
Net Advertising 98.1 82.3 75.8
Other S,G&A 74.4 65.8 61.7
-------- -------- --------
Continuing EBITDAR net of bonus $ 25.2 $ 41.0 $ 44.9
* Net sales for Fiscal 2000 includes two months of revenues from
discontinued merchandise lines totaling approximately $66 million
From a sales perspective, 2000 did not meet our expectations as the
Company's results, particularly during the holiday season, were negatively
impacted by the overall retail slowdown. After several years of robust growth,
many retailers experienced a challenging year, punctuated with a holiday season
that saw December comparable store sales rise 0.7%--the lowest increase since
1995. The following chart summarizes jewelry and home sales and margin results
for Service Merchandise in 2000:
($ millions) Jewelry Home
-------------------------------------- --------------------------------------
Plan Actual Variance Plan Actual Variance
------ ------ -------- ------ ------ --------
Retail sales* $678.4 $654.0 (3.60%) $732.9 $709.8 (3.14)%
Retail gross margin* $329.2 $320.9 (2.53%) $214.2 $215.1 0.41%
Gross margin % 48.5% 49.1% 54 bps 29.2% 30.3% 108 bps
* Excludes layaway, sublease income and other revenues
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JEWELRY PERFORMANCE
After a strong first eight months, jewelry sales softened in the fall
and continued to be weak through the holiday season. Full-year jewelry sales
were $654.0 million, $24.4 million below plan. Sales for the fourth quarter were
below plan by $35.2 million. However, the Company experienced better than plan
sales performance in bridal jewelry, gold and special events. In addition, gross
margin rates exceeded plan.
During 2000, certain economic fundamentals that had driven jewelry
sales growth in recent years were weaker, including reversal of the "wealth
effect," higher interest rates, increased energy costs and slower economic
growth. As a result, the jewelry retail sector as a whole experienced a
challenging year as demonstrated by the following same-store sales growth
comparison:
HOLIDAY HOLIDAY
1999 2000
------- -------
Finlay Enterprises, Inc. 7.2% (1.3)%
Friedman's, Inc. 6.2% 5.5%
Reeds Jewelers, Inc. 5.0% (8.9)%
Tiffany & Co.* 27.0% (3.0)%
Whitehall Jewellers, Inc. 12.5% (8.7)%
Zale Corporation 16.3% (3.1)%
* U.S. sales only
HOME PERFORMANCE
Home merchandise sales were affected through the first three quarters
of 2000 by the clearance of discontinued hard goods lines, with trends similar
to those experienced in jewelry in the last four months of 2000. Full year home
merchandise sales for Service Merchandise were $709.8 million, $23.0 million
below plan, and sales for the fourth quarter were below plan by $21.2 million.
However, gross margin rates exceeded plan for the year, resulting in gross
margin dollars being above plan. Holiday, decorative home and jewelry boxes were
among the Company's strongest sellers in the holiday season.
In the homegoods sector, economic factors and demographic trends are
expected to continue to drive growth. The U.S. Census Bureau has estimated that
home ownership would increase to 70% in 2000 from 67% in 1998 - both
historically high rates. Low interest rates continue to spur home sales, as many
Americans are buying a first (or second) home or trading up to a bigger home. In
addition, homegoods buyers, concentrated in the 35-54 year old age group, are
one of the largest and fastest growing segments in the U.S. Despite these
favorable indicators, the homegoods retail sector had a weak 2000 compared with
1999, as demonstrated by the following same-store sales growth comparison:
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HOLIDAY HOLIDAY YTD YTD
1999 2000 1999 2000
------- ------- ---- ----
Bed Bath & Beyond, Inc. 9.6% [NA] 9.0% 5.1%
Cost Plus, Inc. 8.1% 2.0% 8.6% 4.6%
Linens `n Things, Inc. 4.5% 2.4% 5.4% 3.7%
Pier 1 Imports, Inc. 6.1% 0.0% 1.8% 8.0%
Williams-Sonoma, Inc. 4.3% 2.8% [NA] [NA]
REAL ESTATE SUBLEASING PERFORMANCE
With the assistance of its real estate advisors, the Company initiated
a strategic program to lease surplus space made available by the remodel
program. The Company gained the approval of the Bankruptcy Court for 45 sublease
transactions to a variety of national and regional tenants, including T.J. Maxx,
Office Depot, Bed, Bath & Beyond, Staples, Michaels, A.C. Moore, and H.H. Gregg.
Revenues from sublease income and related recoveries were $3.4 million below
plan in 2000. Nevertheless, lower than planned expenses resulted in actual Real
Estate impact on EBITDAR slightly exceeding Plan.
The following table summarizes the 2000 results of the subleasing
program compared to the 2000 Business Plan:
($ millions) 2000 2000 Actual b/(w)
Business Plan Actual Plan
------------- ------ ------------
Transactions 73 45 (28)
Subtenant rent and recoveries $ 6.0 $ 2.6 $(3.4)
Real Estate impact on EBITDAR $(6.8) $(6.2) $ 0.6
EXPENSE MANAGEMENT
In the face of weak sales in both the stores and in eCommerce, and in
the face of challenges encountered in the real estate subleasing program,
Service Merchandise carefully managed expenses. The Company reduced its net
advertising expenses by $6.5 million which, when coupled with the better than
Plan gross margin rates, resulted in merchandising activities being off Plan by
only $3.6 million. In addition, employment expense was $6.4 million better than
plan and other S,G&A expenses were $4.1 million better than plan. Shrink results
were also significantly better than plan. Achieving significantly better than
plan shrink is a tribute to efforts of our store and field associates and
improved practices implemented in 2000. With the remodeling program and the
exiting inventory clearance program occurring simultaneously in the stores, the
shrink results are noteworthy.
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2000 BUSINESS 2000 ACTUAL TO
($ in thousands) 1999 ACTUAL 2000 ACTUAL PLAN PLAN VARIANCES
----------- ----------- ------------- --------------
Net Sales* $1,401,250 $1,368,863 $1,422,551 $(53,688)
Total Shrink and D&D $ 40,357 $ 29,394 $ 33,408 $ 4,014
% of Net Sales 2.88% 2.15% 2.35% 20 bps
* Net Sales excludes discontinued lines and closed stores
It is this careful management of the Company's expense base that enabled it to
surpass its EBITDAR goal even in a tough economic environment.
CAPITAL EXPENDITURE AND REMODEL MANAGEMENT
During 2000, the Company refurbished or converted all 218 of its
stores. While most of the stores were refurbished to reduce selling area as a
consequence of discontinuing certain merchandise lines, 75 stores were converted
to both smaller selling and warehouse areas, leaving the remaining surplus area
for alternative uses, including subleasing to retail tenants. Those conversions
began in April and continued throughout the year. The Company planned 2000
capital expenditures of $67.8 million, of which $49.1 million was allotted to
store conversions. Actual store conversion capital expenditures totaled $58.7
million, primarily due to the conversion of five more stores than planned and
higher than anticipated costs. Although capital expenditures were higher than
plan, the five additional stores were converted because favorable subleases were
negotiated.
LIQUIDITY
The Company benefited from strong liquidity throughout 2000, with a
minimum borrowing availability of $146.7 million reported on November 17, 2000
and a maximum availability of $343.3 million reported on January 5, 2000. At
December 31, 2000, availability was $229.3 million. When the Company does not
have to pay cash in advance for merchandise but can pay after delivery,
liquidity improves. In order to offer payment terms many vendors rely on factors
or similar financial intermediaries. CIT has committed to provide Service
Merchandise's vendors up to an aggregate new three-year, $35 million Committed
Vendor Credit Line. The CIT commitment was approved at the February 2001 Omnibus
Hearing and is expected to enhance vendor confidence and relations.
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CLEARANCE
The Company made the strategic decision to discontinue the electronics,
toys and fitness merchandise categories in 2000. The Company promptly commenced
a clearance sale of approximately $189 million in discontinued merchandise at
cost and concluded the sale at the end of August 2000. Actual clearance sale
results were consistent with our expectations and financial plan.
EXCLUSIVITY
The Company sought, and the Bankruptcy Court approved, the extension of
the period in which the Company has the exclusive right to file or advance a
plan of reorganization in its Chapter 11 cases to January 31, 2002, and further
extended the Company's exclusive right to solicit acceptances of its plan to
April 1, 2002. These extensions will allow the Company time to complete and
implement the 2001 Business Plan, which should serve as the basis for the plan
of reorganization to be negotiated with our Creditors' Committee later this fall
and for anticipated emergence from Chapter 11 in 2002.
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III. 2001 BUSINESS PLAN INITIATIVES
JEWELRY
The Company's jewelry operation has long been the foundation of its
business. It was the foundation of the 2000 Business Plan, and it will continue
to be central to the Service Merchandise business in the future. The 2000
merchandising strategy essentially continued the core retail strategy that had
been in place for many years, but also featured an expanded offering of jewelry
and jewelry-related products. As part of this expanded offering, many stores
were converted to an expanded jewelry format, and in a limited number of stores,
this expansion effort featured the higher-end gallery product category. Service
Merchandise has always sold a wide variety of jewelry, including higher-end
jewelry, and in light of the economic conditions and consumer trends at the
time, Service Merchandise decided to experiment with a focused approach in
certain stores on more higher-end, gallery jewelry. This limited experiment was
not as successful in its current form as planned and will not be expanded or
aggressively pursued in 2001.While Service Merchandise can and will sell
higher-end jewelry, the core customer remains focused on value at lower price
points.
Accordingly, in 2001, Service Merchandise will focus on its core
competencies - assortment, quality and value pricing - to meet the needs and
desires of today's jewelry customer. As part of these efforts, Service
Merchandise plans to:
- Implement a key item initiative (called Service Select(TM)). Service
Merchandise will continue to offer an impressive, and second to none,
assortment of jewelry, but with the key item initiative, it will
highlight and feature the most frequently purchased jewelry items. The
key item merchandise will be highlighted and signed within jewelry
cases at compelling prices, thus showing every customer who enters a
store that these key items offer tremendous value.
- Simplify and amplify the messages delivered in advertising media. The
Company intends to re-establish its position as America's Leading
Jeweler(TM) in all of its advertising and deliver messages of dominant
assortments and quality merchandise at great prices.
- Reformat the gallery stores to incorporate the best gallery items into
the core jewelry cases and expand the more efficient program to over
70 stores.
Service Merchandise continues to maintain a strong and loyal jewelry
customer base, and in 2001, the Company will reinforce the attributes of its
jewelry business - assortment, quality and value - that we believe our customers
clearly want.
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HOME
While jewelry is the cornerstone of Service Merchandise, the home
merchandise categories are an integral part of the Company's business. In 2000,
these home merchandise categories were well managed by the home-merchandising
department. Although sales were lower than plan, margin rates and gross margin
dollars were above plan. Additionally, when sales appeared to be slowing due to
the weakening economy, inventories were adjusted accordingly, resulting in a
better than plan ending inventory. These accomplishments are particularly
noteworthy in light of the significant changes that were made to the merchandise
mix in 2000 with the elimination of electronics, toys and fitness categories.
Despite these accomplishments, Service Merchandise recognizes that, in
order to drive long-term growth, its assortment of home merchandise must be made
more compelling and strategically integrated with jewelry. This is not to imply
that additional wholesale changes to the home merchandise mix are being
considered, but the strategic positioning of the current merchandise mix -
through marketing, in-store presentation, space allocations, margin mix and key
categories - is still being refined. To achieve this goal, Service Merchandise
plans to:
- Introduce a key item initiative that highlights and features product
subcategories that have proven to be the strongest and have the
greatest potential to drive sales and profits. Key items will be
promoted by in-store signage and product packaging that tell the
customer that the featured items are great value purchases.
- Create a greater sense of retail excitement and improve in-store
presentation through better space allocation, bulk stack value
offerings, better end-cap presentations and better use of register
tips.
- Continue to support dominant assortments of competitively priced
branded and private label merchandise.
- Refine allocations of space by category to capitalize on successes and
improve sales and margin dollars per square foot.
- Introduce additional incremental subcategories of product identified
as complementary to the jewelry business and strategic enhancements to
Service Merchandise's home business.
- Leverage its stronger margin mix to achieve longer-term sales growth
by adjusting advertising space allocations, price points and timing.
- Continue to support key categories with Internet line extensions to
further enhance dominant assortments.
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In 2001, Service Merchandise will build on the foundation laid in 2000, a
year of significant change in home merchandising, and refine and improve its
strategic integration with jewelry while applying the same management principles
that led to success in 2000.
MARKETING
As Service Merchandise changed in 2000 through the elimination of
merchandise categories of electronics, toys and fitness, which drove customer
traffic but were largely unprofitable, the marketing program also changed. In
2000, Service Merchandise developed a comprehensive marketing plan, with a brand
building emphasis, to communicate the Company's enhanced focus on jewelry and
complementary home products to current customers and potential new customers.
Based on a review of 2000 marketing and advertising efforts, Service
Merchandise concluded that (i) due to the elimination of certain product
categories and the effect that the elimination had on shopping patterns, the
Company's return on its advertising investment was lower during non-holiday
months when customers were less likely to shop the categories that the Company
now offers; (ii) the emphasis on building a brand was premature given the
ongoing refinements in store presentation and in the home product offering; and
(iii) value and price remain important to the Service Merchandise customer. As a
result of this analysis, there will be a fine-tuning of existing programs,
primarily focused on reinstating and emphasizing value and price into Service
Merchandise's advertising program.
The Company plans to allocate a disproportionate share of advertising
dollars to support highly identifiable and profitable sales peaks, primarily
during the holiday periods of Valentine's Day, Mother's Day and Christmas. This
approach will allow for the casting of a wider net at peak holiday periods to
reach more customers and prospects when they are clearly in the marketplace. In
addition, this approach reduces advertising expense during the non-holiday
trough periods. This is a shift in strategy, from a historical point of view,
from a highly structured advertising program run every two weeks, regardless of
sales or profit potential. Other marketing and advertising initiatives for 2001
include:
- Re-evaluation of the broadcast advertising program. The Company is
reviewing the possibility of reducing or eliminating broadcast in the
second half of 2001 in favor of a higher frequency newspaper insert
and print program.
- An enhanced value emphasis both in its external advertising media and
in its in-store-signing program to reflect a much stronger value
strategy.
- Support for the key item program with new packaging designs featuring
the program's logo, Service Select(TM). This highly visible package is
expected to deliver a strong value message and additional sales.
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- The development of an in-store stack out and end cap program to
enhance merchandise presentation and create spontaneous add-on sales
through dominant displays of merchandise that clearly demonstrate and
enforce Service Merchandise's highly competitive price/value position.
- A revised spring sourcebook that will emphasize outdoor seasonal and
home merchandise only (no jewelry). The spring sourcebook will be
split into two geographical mail drops - southern stores in February
and northern stores in March. Overall, circulation is expected to
increase by 3 million pieces from the 2000 spring sourcebook.
SALES/FIELD ORGANIZATION
During the Company's reorganization, the Sales/Field Organization has
undergone dramatic change. The change has not been limited to a reduction in
force, but has included significant cultural change as well. In 2000, the
Company eliminated an organizational structure that separated the jewelry field
organization and the home field organization and replaced it with a single Sales
Organization that encompasses both jewelry and home. This resulted in cost
savings, a consolidation of positions, with virtually all associates learning
new roles and responsibilities, and a streamlining of reporting structures. The
most important aspect of this consolidation was the emphasis placed on the
development of a sales culture.
The Company continues to refine responsibilities at the store,
district, regional and corporate level in order to develop a sales culture and
reach the appropriate expense level for a specialty retailer operating a 25,000
square foot box. Although the Company reduced staffing in the stores in 2000, it
is now the appropriate time to reduce staffing even further to levels more
competitive with specialty retail benchmarks. Deeper staff reductions in 2000
would not have been prudent in light of the significant initiatives implemented
in the stores, such as the clearing of discontinued merchandise lines and store
remodels. Now that the Company is further into its repositioning, staffing
throughout the organization will be modified to track specialty retailer
benchmarks. The following chart depicts the significant change that has occurred
in the Company's headcount during the past few years, most of which was in the
stores.
FYE 1998 FYE 1999 FYE 2000 2/3/01
-------- -------- -------- ------
FTE's 16,631 11,817 6,768 5,438
Temps 7,829 6,603 3,832 950
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The staff reductions in the stores will require a simplified operating
structure within the stores as well as within the divisions of the Company that
support the stores. For example, the Company plans to implement simpler pricing
and tagging procedures geared towards the new key item program, but this will
require more emphasis on planning and coordination with the jewelry and home
merchandising departments. Also, with the assistance of the Logistics
department, the schedule for receiving merchandise from the distribution center
will follow fixed schedules in order to allow the stores to more efficiently
plan staffing requirements. Most importantly, the emphasis on a sales culture
will continue, but more focus will be placed on taking advantage of the existing
traffic by better in-store presentation of merchandise to ensure that sales
opportunities are maximized with customers already in the store.
In order to effect this simplified operating structure, the Sales/Field
Organization will integrate more closely with the merchandising and marketing
departments. Historically, Service Merchandise utilized its store associates as
purely operational tools. That approach caused the Company to miss valuable
insight into customer behavior, sales patterns, marketing effectiveness, and the
impact that corporate driven tasks, such as price changes and plan-o-gram
changes, have on sales and expense efficiencies. We now recognize the tremendous
value our associates in the stores can add. They will play an instrumental role
in the development and implementation of the key item program. They will be a
key contributor to marketing strategy. They will be involved in every decision
and practice that touches or impacts the customer.
In 2001, store management will consist of a Store Manager and an
Assistant Store Manager, whereas in 2000, the structure included a Store
Manager, a Sales Manager and Sales Support Manager. In addition, the store
associate headcount, which averaged between 25-35 in 2000, is expected to
average between 20-25 in 2001.
The following table further contrasts 2000 and projected 2001 store
staffing levels:
2000 2001 VARIANCES
---- ---- ---------
Average hours per store (per week) 830 580 250
Full-time associates,
including management (avg. per store) 15 8 7
Salaried management 3 2 1
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A summary of the projected 2001 field structure plan is as follows:
2000 PLAN 2001 PLAN VARIANCES
--------- --------- ---------
Regional Sales Manager 3 2 1
District Sales Manager 24 20 4
Sales Support Supervisor 24 10 14
Field Trainers 5 5 0
Regional Human Resource Manager 3 2 1
Regional Recruiter 3 2 1
Regional Loss Prevention Manager 2 2 0
District Loss Prevention Manager 16 10 6
-- -- --
80 53 27
The result of these and other efforts will be a further rationalization
of the Company's expense structure and staffing levels in 2001 based on current
industry "best practices." Approximately 1,750 full time positions have been
eliminated, including 1,630 positions in the stores and field organization, and
approximately 120 positions at the sales support center. These expense
reductions, together with the consolidation of space at the Company's sales
support center and refinements to its jewelry repair organization, are expected
to generate $35 million in savings.
REAL ESTATE
In 2000, Service Merchandise's real estate activities were focused on
maximizing the utilization and value of the Company's real estate portfolio.
Subleasing the surplus space created as a result of the downsizing of the
Company's stores was the key real estate initiative in 2000. While substantial
progress has been made to date, the subleasing program is progressing slower
than originally anticipated, primarily due to a growing surplus of retail real
estate in the market generally, retailers holding back on new stores due to a
slowing economy and overcoming various hurdles in implementing a sublease
program of this size and nature.
In addition to the subleasing program, the Company also embarked on a
store remodel program in 2000. Based upon a comprehensive review of its store
base during 1999, Service Merchandise determined that substantially all of its
stores would be part of the business. The Company developed a transition plan
designed to convert stores with minimal disruption during the refurbishment
period.
Class I stores feature an expanded jewelry department and revised home
layout with new fixtures and certain interior upgrades. Class I stores
incorporate a demising wall to facilitate the subleasing of excess space in the
store. Class III stores are similar to Class I stores except that jewelry
departments are not expanded, new home fixtures are generally not purchased and
interior upgrades are kept to a minimum. Like Class I stores, Class III stores
received a demising wall and are sublease ready. Class II stores were not made
ready for subleasing.
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Instead, Class II stores sales areas were reduced by installing fixture walls in
front of the former electronics and toys sales areas and the home layout was
revised.
A summary of the status of the store conversion program is shown in the
following table:
2000 BUSINESS 2000
STORE CLASS PLAN ACTUAL
----------- ------------- ------
Class I 70 63
Class II 146 148
Class III 0 10
----- -----
Total 216 221
During 2000, the Company also closed and sold its Montgomery
distribution center. To further rationalize its real estate holdings, Service
Merchandise retained Grubb & Ellis to assist in its decision making process with
regard to its sales support center real estate opportunities. Grubb & Ellis is
currently assisting Service Merchandise as it pursues a sale of the building,
with the Company leasing back approximately 165,000 sq. ft. of the total 365,000
sq. ft. it previously occupied. This process is expected to be completed in
2001.
In 2001, the Company's real estate activities will continue to be
focused on maximizing the utilization and value of Service Merchandise's real
estate portfolio. However a significant change will be the alignment of the
subleasing and remodel programs. In 2000, the remodel program was driven by
retail business needs, but in 2001, remodels will be driven solely by the
completion of a sublease transaction. In other words, the Company will generally
remodel stores that it first subleases. In order to conserve capital, the
Company's real estate marketing efforts will be focused primarily on the 38
Class I stores that have already been remodeled but not yet subleased. Secondary
emphasis will be placed on those stores which have not been remodeled but have
strong tenant interest.
CAPITAL STRUCTURE/LIQUIDITY
To fund the 2000 and 2001 Business Plans, as well as future operations,
and in anticipation of emergence from Chapter 11, Service Merchandise obtained a
four-year, $600 million DIP to exit credit facility. This facility also provides
terms for exit financing for ongoing capital improvements, operating expenses
and general working capital once the Company emerges from Chapter 11. The DIP to
exit facility is structured as a $540 million revolver, with a $60 million term
loan and a letter of credit sub facility of $150 million. The minimum
availability under this facility over the 2000 peak borrowing season was $146
million.
The Company has also received Bankruptcy Court approval to enter into a
three year, $35 million, Committed Vendor Credit Line with CIT Commercial
Services. Service Merchandise believes that this new credit line with CIT will
help to increase vendor confidence as the Company moves towards 2002 and the
anticipated emergence from Chapter 11.
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OTHER
Information Technology
The information technology department has contributed significantly to
Service Merchandise by providing a sound, reliable infrastructure and advanced
functionality throughout the Company's business units. During 2000, obsolete
point-of-sale registers were replaced and all payment processing and electronic
signature capture equipment was replaced with Checkmate eNtouch. In May of 2000,
a new warehouse management system was installed in the Nashville Distribution
Center for home products.
In 2001, a program aimed at replacing the Company's store system
software will begin. Primary objectives of the software replacement will be ease
of use and simplification of complex point-of-sale transactions, ultimately
enhancing the customers' shopping experience. The new store system will be
implemented in pilot stores during 2002, with the rollout expected to be
completed in 2003.
Internet
The goal of the Company's eCommerce division has been to leverage
Service Merchandise's strength in order processing, fulfillment and customer
service in order to maximize sales through alternative selling channels,
including the Internet, mail/phone orders and corporate sales. To enhance the
shopping experience, the Company now offers over 2,500 items available only on
the Internet. For 2001, Service Merchandise will further enhance the integration
of its web channel into the stores, advertising and customer service. Because
sales slowed from planned projections in 2000, the Company's infrastructure
already has the capacity to accommodate the sales planned for 2001. Thus,
capital expenditures, as well as operational expenses, will be curtailed in 2001
from 2000 levels.
Logistics
During 2000, Service Merchandise continued to rationalize its logistics
infrastructure to support in-store and Internet sales efforts and reduce costs.
The elimination of under-performing product lines reduced the Company's
warehouse capacity needs. As such, the Company closed its Montgomery
distribution center in June 2000 and its Orlando distribution center at the end
of the year. The remaining operations were consolidated in the Company's 1.9
million cubic feet Nashville regional distribution center. In May, the Company
completed the implementation in this distribution center of a new warehouse
management system purchased from Optum.
Service Merchandise will continue to rationalize its logistics
infrastructure to support the Company's in-store and Internet sales efforts and
reduce costs. During 2001, Service Merchandise will operate one centralized
distribution center located in Nashville, Tennessee. Nashville is centrally
located relative to the Company's current vendor and store base and is the
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optimal cost and service location. During most of the year, the Nashville
distribution center will be more than adequate for the Company's storage and
handling needs. During the peak period, if necessary, the Company will utilize
additional space at its return facility in Bowling Green, Kentucky. The Company
will continue to analyze additional consolidation opportunities.
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IV. CONCLUSION
The Service Merchandise team believes that the path for 2001 remains
clear - building on the foundation laid in 2000, the Company will continue to
reposition its business as a multi-channel specialty retailer of fine jewelry
and home merchandise by (i) refining its merchandising strategy; (ii) continuing
to unlock value from real estate through our subleasing program; (iii) reducing
overhead and operating costs to match competitive specialty retailers; and (iv)
implementing a marketing and advertising strategy designed around the refined
business model. We believe that these efforts will strengthen our business and
provide a foundation for emergence from Chapter 11 in early 2002. We believe the
measure of success this year should be meeting our Threshold EBITDAR goal.
We are well prepared to meet the challenge that lies before us, and we
look forward to working closely with all of our important constituencies -
customers, employees, landlords, lenders, suppliers and creditors - to continue
the revitalization of Service Merchandise.
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This 2001 Business Plan and the component target and threshold financial
goals were developed by senior operating and financial management of Service
Merchandise Company, Inc. Management believes that these goals are reasonable,
given today's market conditions. However, the 2001 Business Plan is based on a
number of assumptions and estimates that, although considered reasonable by
management, are inherently subject to significant known and unknown risks and
uncertainties. There can be no assurance that the anticipated results will be
realized and actual results may vary materially and adversely from those
presented.
This 2001 Business Plan includes certain forward-looking statements
(all statements other than those made solely with respect to historical fact,
including but not limited to the target and threshold financial goals) which are
subject to various assumptions regarding the Company's operating performance
that may not be realized and are subject to significant business, economic,
political and competitive uncertainties and potential contingencies, including
those set forth below, many of which are beyond the Company's control.
Consequently, such matters should not be regarded as representations or
warranties by the Company that such matters will be realized. Actual results may
differ materially and adversely from the information contained in this 2001
Business Plan. The Company undertakes no obligation to update or revise this
2001 Business Plan.
The forward-looking statements and 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: the ability of the
Company to continue as a going concern; the ability of the Company to operate
pursuant to the terms of, and access liquidity from, the DIP to exit credit
facility and the vendor line of credit; the ability of the Company to develop,
prosecute, confirm and consummate one or more plans of reorganization with
respect to the Chapter 11 Cases; 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 ability of the Company to successfully implement on a timely
basis the 2001 Business Plan initiatives; risks associated with third parties
seeking and obtaining court approval to terminate or shorten the exclusivity
period for the Company to propose and confirm one or more plans of
reorganization, for the appointment of a Chapter 11 trustee or to convert the
Company's cases to Chapter 7 cases; the ability of the Company to reduce its
workforce and related expenses and to achieve anticipated cost savings; the
ability of the Company to obtain trade credit, and shipments and terms with
vendors and service providers for current orders; the ability of the Company to
sublease successfully additional portions of its real estate and to consummate
the sale/leaseback of the headquarters building; the successful consolidation of
its distribution centers; potential adverse developments with respect to the
Company's liquidity or results of operations; competitive pressures from other
retailers, including specialty retailers and discount stores, which may
adversely affect the nature and viability of the Company's business; 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 to fund and execute its business plan; the ability of the Company to
attract,
21
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retain and compensate key executives and associates; the ability of the Company
to attract and retain customers; potential adverse publicity; and uncertainties
regarding real estate occupancy and development costs, including the substantial
fixed investment costs associated with opening, maintaining or closing a Company
store.
In preparing the 2001 Business Plan, the management of Service
Merchandise has consulted with Jay Alix & Associates and Rothschild Inc. Both
Jay Alix and Rothschild have acted exclusively in an advisory capacity assisting
Service Merchandise with the preparation of this 2001 Business Plan and do not
express an opinion or any other form of assurance with respect to the
information contained in this Business Plan.
This 2001 Business Plan is being made available to Service Merchandise's
associates and others. Given the large number of such persons it is being made
available publicly. Readers are cautioned against placing undue reliance upon
the goals, estimates, plans or other information included herein. This 2001
Business Plan should be considered together with the Company's Annual Report on
Form 10-K for the year ended December 31, 2000, including the management's
discussion and analysis of financial condition and results of operations and the
audited financial statements and notes thereto.
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SENIOR MANAGEMENT STRUCTURE
[CHART]
SINGLE STORE STRUCTURE
[CHART]
Appendix A-1
28
Appendix B-1
STORE LOCATIONS
The numbers in parentheses show the number of stores in a state and, where there
is more than one store in any city, the number of stores in a city as of
February 28, 2001. As of February 28, 2001, the Company operated 218 stores in
31 states.
ALABAMA (6) FLORIDA (42) ILLINOIS (18) MASSACHUSETTS (6) NEVADA (1) TEXAS (26)
Birmingham (2) Altamonte Springs Arlington Heights Auburn Las Vegas Arlington
Huntsville Boca Raton Berwyn Burlington NEW YORK (6) Austin
Mobile Boynton Beach Bloomingdale Natick Hartsdale Baytown
Montgomery Bradenton Burbank Saugus Lake Grove Beaumont
Tuscaloosa Brandon Crystal Lake Stoughton Middletown Dallas
ARKANSAS (1) Casselberry Downers Grove (2) Swansea Patchogue Fort Worth
Little Rock Coral Springs Joliet MARYLAND (2) Poughkeepsie Harlingen
ARIZONA (3) Daytona Beach Lansing Baltimore Woodhaven Houston (7)
Glendale Fort Myers Matteson Columbia OHIO (4) Lake Jackson
Mesa (2) Hollywood Naperville MAINE (2) Cincinnati (3) Laredo
CONNECTICUT (5) Jacksonville (2) Niles Augusta Springdale Lewisville
Danbury Kissimmee Norridge S. Portland OKLAHOMA (3) Longview
Derby Lakeland Oaklawn MICHIGAN (6) Oklahoma City McAllen
Manchester Largo Orland Park Novi Tulsa Mesquite
Newington Leesbury Schaumburg Roseville Warr Acres N. Richland Hills
Orange Miami (2) Skokie Southgate PENNSYLVANIA (6) Plano
DELAWARE (3) N. Clearwater Waukegan Sterling Heights Allentown Richardson
Dover N. Miam INDIANA (10) Troy Greensburg San Antonio
Wilmington (2) Naples Castleton Westland Harrisburg Sugar Land
Ocala Clarksville MISSOURI (4) Lancaster Tyler
Orange Park Evansville Crestwood Reading VIRGINIA (5)
Orlando (3) Fort Wayne Florissant Wilkes-Barre Chantilly
Pembroke Pines Greenwood Springfield SOUTH CAROLINA (3) Chesapeake
Pensacola Indianapolis (2) St. Peters Columbia Fredricksburg
Pompano Beach Lake MISSISSIPPI (3) Greenville Glen Allen
Port Charlotte Merrillville Gulfport N. Charleston Midlothian
Port Richie Mishawaka Hattiesburg TENNESSEE (10) VERMONT (1)
Sanford KANSAS (1) Jackson Antioch Burlington
Sarasota Overland Park NORTH CAROLINA (7) Chattanooga
Spring Hill KENTUCKY (6) Cary Cookeville
St. Petersburg Florence Charlotte Franklin
Stuart Lexington Fayetteville Jackson
Sunrise Louisville (2) Gastonia Johnson City
Tallahassee Owensboro Greensboro Knoxville
Tampa (2) Paducah Pineville Madison
W. Melbourne LOUISIANA (9) Raleigh Memphis (2)
W. Palm Beach Baton Rouge NEW HAMPSHIRE (5)
GEORGIA (11) Bossier City Dover
Alpharetta Harvey Manchester
Augusta Houma Nashua
Columbus Lafayette Plaistow
Douglasville Metarie Salem
Duluth Monroe NEW JERSEY (3)
Kennasaw Shreveport Hazlet
Macon Slidell Paramus
Morrow Wayne
Savannah
Smyrna
Tucker
Appendix B-1
29
STORE RENOVATION REVIEW--OLD PROTOTYPE D PLAN
[PICTURE]
Appendix C-1
30
STORE RENOVATION REVIEW--CLASS I PLAN
[PICTURE]
Appendix C-2
31
STORE RENOVATION REVIEW--CLASS II PLAN
[PICTURE]
Appendix C-3
32
[Picture of Franklin, TN Store - Before Renovation]
Appendix C-4
33
[Picture of Franklin, TN Store - After Renovation]
Appendix C-5
34
PROFESSIONALS RETAINED BY SERVICE MERCHANDISE COMPANY, INC.
Corporate Counsel Bass, Berry & Sims PLC
Restructuring Counsel Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates
Financial Advisors and Restructuring Consultants Jay Alix & Associates
Investment Bankers Rothschild, Inc.
Real Estate Advisors Gemini Realty Advisors LLC
Thompson Associates
Real Estate Agents Centennial/Grubb & Ellis
- --Dispositions The Keen Venture (a joint venture of Keen Realty
Consultants, Inc., Trammel Crow and Dean & Associates)
Real Estate Agents Creative Realty Group
- --Subleasing Service Real Estate Venture (a joint venture of Keen
Realty Consultants, Inc., and Dean & Associates
associated with affiliates of Grubb & Ellis)
Communications Professionals Sitrick And Company
Claims Professionals Robert L. Berger & Associates, Inc.