Department store Trimingham Brothers Ltd. has bought out its arch rival H.A. & E. Smith's Ltd. for an undisclosed sum, the companies announced yesterday.

After months of speculation, the bosses of both companies confirmed the merger and said it will lead to job losses at Smith's initially, adding that in the long run it will in fact lead to job creation.

The combined stores will now stretch over three buildings on Front Street and Queen Street and three linked buildings on Reid Street. Holes will be punched through the buildings to create easy access from all three sides.

“This will take effect from early September,” said Lawrence Trimingham, president of Trimingham's.

“Smith's will retain the real estate and we will be leasing space from them.”

At a Press conference yesterday the new owners said everything in Smith's would stay the same at the moment and decisions about the future layout of the combined stores would be made at a later date. The new owners were unsure whether or not they would be keeping the Smith's name alive but the famous Smith's signs will stay put for the moment.

Roger Davidson, president of Smith's said: “We have been talking for some while about how to combine the stores to get the best for both businesses.”

When asked to reveal how much was paid for Smith's in a deal that has taken four years to come to fruition, all Mr. Davidson would say was: “It is more than they wanted (to pay).”

Mr. Trimingham said that while the decision may come as a surprise to some, over the past 100 years that they had both been in business, they have not just been great rivals but also great business partners.

“Times have changed and so has the retail industry,” said Mr. Trimingham. “We believe that the combination of two of Bermuda's most renowned stores will help us provide a better service component and product range to our local customers and visitors to the Island and remain the flagship of the Bermudian retail industry. This combination is good for our customers, good for our visitors and good for our people.”

Mr. Davidson added: “Whilst we anticipate that a large majority of our employees will be offered positions with the new entity, it is regrettable that, due to economies of scale, some may not. Overall, despite some initial job losses in the short term, we anticipate that, in future, with the growth of the new entity and the expansion into new markets we will see an increase in the number of positions available in the company.”

Smith's currently has 106 staff and Trimingham's has 240. Neither of the bosses would be drawn on what exact job losses there might be.

Mr. Davidson said that the company's decision to sell had been brought about by a combination of a decline in tourist spending, an increase in Bermudians travelling overseas to shop and the advent of Internet shopping.

“Whilst we recognise that these are challenges all local retailers face, there are clear advantages in having one combined and strengthened retail operation,” said Mr. Davidson. “The move allows us to pursue other interests.

Trimingham's will also take over the Treasure Chest on Queen Street and Trimingham's will now have 16 stores across the Island.

Mr. Davidson will stay on to make sure that the transition is smooth, but said he will be retiring after 40 years in retail. He is now 65.

“The move is good news for the local tourism industry,” said Mr. Davidson. “Retailers play a pivotal role in Bermuda's tourism industry and this combination will offer world-class products and services to visitors to the Island.”