(Business Wire; 11/06/97)

Business/Lifestyle Editors

NASHVILLE, Tenn.--(BUSINESS WIRE)--Nov. 6, 1997--

Plans Also Include Chain-Wide Expansion of Touch Screen Kiosks,

RF Scanning

Service Merchandise Co. has become the first national retailer to allow customers to make on-line purchases of items from gift registry lists.

With this advancement, customers can access registrants' lists by clicking on the company's Internet site at www.servicemerchandise.com, where they can view full-color product images of all registry items. They can now purchase gifts from the lists on-line, and the system instantaneously updates the registrants' lists nationwide whenever purchases are made.

Shoppers now have the option of completing registry purchases through several methods: by viewing the list items on the Internet and completing the transaction on-line, by calling an 800 number and ordering by phone or by taking the list to a Service Merchandise store and shopping in person. All purchases are reflected with instant updates throughout the company's 359-store system, virtually eliminating duplicate gifts. Now in it sixth year, the Service Merchandise Bridal and Gift Registry is one of the nation's most popular gift registries, with more than 100,000 registrations annually.

Current plans call for the system to allow customers to register their gift lists on-line, from their home or office computers, sometime in the first half of 1998.

Service Merchandise introduced on-line purchase capability to the site in November 1996, allowing customers to view and purchase 10,000+ Service Merchandise items on-line via secure credit card transaction.

Touch Screen Kiosks, RF Scanning to be in All SMC Stores

In a related Gift Registry development, the company has also announced the planned expansion of its Touch Screen Gift Registry kiosks and radio frequency scanning to include all 359 stores in the chain. The PC-based Gift Registry Touch Screen system was first introduced in 102 key stores nationwide in late 1996, making in-store access to gift registry information readily available at customers' fingertips. All stores will have the touch screen kiosks and RF scanning by the end of March, 1998.

The in-store touch screen registry system allows customers to register at a touch screen kiosk and use a radio frequency scanning gun to scan the bar coded tickets of the items they've selected. The radio frequency technology allows easy identification of the product scanned by displaying a complete name and description, compared to some systems, which provide only a UPC code. It also immediately provides a copy of their gift list.

In addition, shoppers can use the self-service touch screen kiosks to get updated registrants lists for themselves, making it easy to purchase registry items.

"There is not an easier, faster or more convenient system out there," said Laura Walther, Director of Gift Registry Services. She said that engaged couples are interested in saving time and simplifying their lives, and at Service Merchandise they don't even have to make appointments to register. The registry is popular with expectant parents as well.

Service Merchandise fine jewelry and today's lifestyle home product stores offer dominant selections of name brand products and value pricing in the merchandise worlds of fine jewelry, kitchen and dining, home accents and furniture, looking healthy/staying healthy, season to season, travel shop, electronics and kid essentials. The Brentwood, Tenn.-based company employs approximately 25,000 associates. Service Merchandise stock trades on the New York Stock Exchange under the symbol SME.