sales comes from A.F. Smith Trading Company Ltd., when they bunker down this month at their newly-renovated depot on Dundonald Street, next to the Olympic Club.

With an expanding staff and expanding floor space, the company seeks an even larger slice of what chief operating officer Mr. Tim Smith thought could be a $25-million a year business.

After eight years, A.F. Smith will have vacated the Continental Building on the corner of Church Street and Cedar Avenue by Monday, and moved into their new home at 14 Dundonald Street, a building that the firm has owned since 1989.

It removes the need to pay more than $200,000 in rent a year on 6,000 square feet of class `A' office space at $34 per square foot to a separate company, Bishop House Ltd., owned separately by company president, Mr. Anthony Smith.

The entire 7,000-square foot ground floor of the new premises is to be dedicated to an expanded office furniture showroom, sales of office supplies and to Xerox equipment, including an inexpensive colour/black and white photocopy centre.

The company sees a growing need for colour photocopying services and intend to provide an inexpensive product.

All executive and administrative offices will be housed on a second level 4,000-square foot mezzanine. Staff is increasing from 48 to 55.

It is the latest move in a changing game, with the company expecting more customers to benefit from more items on display. The business growth potential is not just being realised in the new market, but it is being actively recruited.

The firm seeks to capitalise on a new identity with the slogan "AF Smith, the office people''. That slogan is designed to identify the firm as leaders in office supplies, office furniture, document products and interior office construction markets.

They are pushing for an expanded product line to foster a larger retail trade, more value for money in their products, better service, more computerised, a better delivery system and a higher standard over all.

Mr. Tim Smith said that business volume is up, after two years of contraction.

It meant that companies had to get better in the leaner years and better again as the business seems to enlarge.

"Companies are seriously looking at volume discounting,'' he said. "The more the larger firms deal with you, the better pricing they want.

"In every business in Bermuda, including ours, the margin is being squeezed.

You have to be more efficient and offer more to the customer, more variety.

There is price sensitivity in this business, too, because retail or corporate customers have no problem shopping overseas if they think they can get a better deal.

"It only takes a `phone call now for companies to order from New York, especially because they are buying volume. We feel that we are not just competing with local companies, but overseas firms, too.

"It is important that we can convince local buyers that they have no need to go overseas.'' MR. TIM SMITH -- "You have to be more efficient and offer more to the customer, more variety.''