Foreign-controlled firm beat out local rival for duty-free contract
The foreign-controlled company awarded the contract to operate the duty-free and specialty retail contract for the new airport terminal was given approval to do business in Bermuda by the Minister of Finance.
Skyport, the airport operating company, announced last week that the Somers Isles Company, founded by Rhona Sutton, a Briton, had won the concession.
Bermuda Duty Free Ltd, the Bermudian-owned company which operates the duty-free retail space at the airport today, made an unsuccessful bid for the contract.
Somers Isles received a licence to carry on business as a local company under section 114 of the Companies Act 1981.
A letter seen by The Royal Gazette and dated December 20, 2019, and signed by Wayne Furbert as the Acting Minister of Finance, imposes several conditions on Somers Isles.
These include that the company must secure a Bermudian investor or partner with a 30 per cent shareholding in the company, or the licence may be revoked by the finance minister after it expires at the end of this year.
The conditions also require that the company has a minimum 90 per cent Bermudian staff during the term of the licence. Somers Isles was also required to report by October 15 on the company’s staffing complement, including the percentage of positions for which Bermudians and non-Bermudians are employed, the type and title of the positions for which Bermudians are employed and the succession plans of the positions for which Bermudians are not employed.
Ms Sutton, described by Skyport as a Bermuda resident, is an entrepreneur and founder of the Rhona Sutton Group, with over 20 years’ experience developing products and designs for international clients including Harrods, Disney, Macy’s, Four Seasons and Ritz Carlton.
Ms Sutton was referenced in a Bermuda Government notice in December 2018 when she applied for permission to buy a property on Harrington Sound Road. She was described at the time as a British citizen and a work-permit holder.
Somers Isles Trading is one of four companies incorporated in Bermuda, which have Ms Sutton listed as their sole director. The others are RBS Design Services Ltd, The Duty Free Shops Bermuda Ltd and Love Bermuda Ltd.
Her addresses on the director listings include one in New York City and another in Zug, Switzerland.
She has spent the past two years developing a customised, branded retail concept, soon to be launched as “Love Bermuda”.
Somers Isles responded to our questions about its progress in meeting the conditions attached to the licence and preparing for the opening of the new terminal.
A spokeswoman said: “As a local company with Bermudian investment, we are committed to fulfilling all the requirements of the licence awarded to our company. This includes creating up to 30 new jobs and meeting the 90 per cent Bermudianisation target.”
She added that Somers Isles was creating “exciting and experiential retail stores” for the new airport terminal, and was proud “to have collaborated with some 45 Bermudian artisans, entrepreneurs and service companies”.
“Many of these niche brands have not been in the airport previously; they will each have their brand story and product offering celebrated in our distinctly Bermudian showcase,” the spokeswoman added.
“In the engaging environment of our Love Bermuda and Somers Isles brands, we celebrate the essence and diversity of Bermuda.”
Last night, a spokeswoman for the Ministry of Finance responded to our questions on the matter.
She said: “In accordance with the Project Agreement negotiated by the former Government, Somers Isles Trading Co was selected by Skyport which had undertaken a bidding process to search for a suitable owner/operator capable of operating the airport outlets.
“For the sake of accuracy, the requirement is for 85 per cent Bermudian staff and the company must report annually to the Minister on its staffing complement, the type of positions they hold as well as a succession plan for positions that are not held by non-Bermudians.
“Regarding the 30 per cent Bermudian shareholding in the company, the Ministry can confirm that the 30 per cent shareholding condition has already been met.”
Skyport, the airport operating company, said there had been only one other proposal to consider and that Somers Isles was investing millions in the project.
A spokeswoman for Skyport said: “Somers Isles Trading Company was one of only two proponents who responded to our Request for Proposals for the new airport specialty retail and duty-free concession.
“Their proposal represents new opportunity, new investment and a new retail concept that focuses on the promotion of niche products by small Bermudian artisans and entrepreneurs that were not previously available at the airport.
“Somers Isles remains committed to its considerable $6 million investment despite the significant impacts of the Covid-19 pandemic on the local and global economies, which in many cases, has led to the reduction or recalibration of planned investments by our other business partners.
“We are excited about the plans that Somers Isles has for the new terminal and remain confident that travellers will share in that excitement come opening day.”
Unsuccessful bidder Bermuda Duty Free Ltd is a wholly owned subsidiary of rum maker Gosling Brothers Ltd.
Charles Gosling, managing director, said: “We made a bid and we lost. If this were done through a government department, under current bidding instructions, we would probably have an idea of where we went wrong in the process.
“We have been told that the end of our concession is the night of December 8. We have yet to receive this notice or indeed Skyport’s decision on the concessionaire, in writing, everything has been a series of polite discussions.”
He conceded that Bermuda Duty Free Ltd had not been completely Bermudian-owned at the time it won the duty-free contract in 1998 when it was a 60:40 venture with World Duty Free.
Mr Gosling said: “After about three years their focus changed and we have been a 100 per cent Bermuda-owned company ever since. We have 100 per cent Bermudian employees and we partnered with about 40 local companies as our merchandise suppliers, giving most of these a first time bite at the cherry.
“We have great employees, some of whom we have offered similar positions at Gosling’s, redundancy to others due to market considerations and retirement.
“As far as I can tell no one has reached out to these individuals which is strange as we have been the exclusive duty-free purveyors for well over 20 years. They are experts in their field.”
Mr Gosling said he hoped Gosling’s products, especially its rums swizzle and ginger beer, would be sold in the new terminal and had reached out to Somers Isles early this year.