softening of retail sales, according to one of the Island's largest home goods stores.

The claim was made in the financial statement for Masters Ltd. for the year ended 31 December 1999, issued yesterday.

Masters reported only a marginal increase in reported earnings, up from $987,927 or 85 cents a share to $998,672 or 86 cents a share.

In a written statement, the company, whose president is Susan Wilson, said: "There is every indication that retail sales are softening and that consumer spending reflects uncertainty over the economic outlook for Bermuda.'' In addition the company said it had kept rents down on its property because of pressure on the retail business on the Island.

Sales for the year increased by 4.4 percent or $493,344 to $11.8 million while the total gross margin increased by 4 percent or $171,089 to $4.5 million.

According to the company, the greater percentage of the increase in sales occurred in the first half of the year under review with the final quarter sales just managing to meet the previous year's level.

The statement said: "In the fourth quarter it was necessary to promote heavily in order to attain the previous year's sales levels -- hence the growth in gross margin dollars was somewhat less than the growth in sales.'' Rental income for the year for Masters stood at $665,579 for 1999, compared to $647,653 the previous year. The company said the increase of $17,426 related directly to additional space leases on the third floor of the company's premises at 21 Reid Street.

"In view of the pressure on retail business in Bermuda, the board of directors have held our retail rates at a reasonable level in order to ensure that we retain good tenants on a long-term basis,'' said the statement issued yesterday evening.

Staff operating costs for the year increased by 5.7 percent or $217,784 to a total of $4.03 million compared with $3.8 million last year. Depreciation, amortisation and interest totalled $636,293 compared with $638,862 in 1998.

Total assets for the year were $15.9 million.

The board declared an extra dividend of 10 cents a share to shareholders of record at April 14, 2000.