Govt. is said to be considering promoting Bermuda as a "duty-free destination'' in a bid to attract more shoppers. The news comes amid concern over a big increase in overseas spending. Deidre Stark reports Soaring overseas spending could spark "drastic'' off-season lay-offs in the retail sector, a Chamber of Commerce spokesman said yesterday.

The Chamber's tourist-oriented retail division chairman Peter Cooper issued the stark warning following the release of retail figures showing residents of Bermuda spent $1.98 million abroad -- 20 percent more than last February.

And some members of the sector -- one of the Island's biggest employers -- have had crisis meetings with Finance Minister Eugene Cox to discuss possible ploys to boost sales while at the same time addressing dwindling tourism.

Trimingham Brothers president Eldon Trimingham said Mr. Cox was "seriously considering'' a rescue plan which would see duty removed on clothing and Bermuda promoted as a "duty-free destination'' to attract serious shoppers.

The dramatic jump in overseas spending highlighted a worrying trend for retailers and dampened the reaction of many in the sector to a 9.2 percent overall increase in retail sales for February, adjusted for inflation.

Gross turnover in February was estimated at $39 million.

Despite the soaring cash lost to overseas shopping, in some sectors the news was good. Leading the way for the month was the motor vehicle and service station sector which recorded a 16.9 percent increase in dollars spent.

Liquor sales were also up strongly at 16.3 percent but retailers cited no specific reason for the gain. Food sales too were healthy up 7.9 percent.

Drug and furniture stores experienced strong sales, largely due to special promotions while hardware and department stores also had positive results.

But clothing and accessories stores recorded falling sales while stores that cater mainly to tourists also suffered declines.

Mr. Cooper said the retail section of the Chamber was desperately trying to get the Government to recognise the duty structure left some local retailers at a severe disadvantage and opened the door for cash to flow out of Bermuda.

"They need to reduce the duties or else take them away completely on some goods,'' he said. "But at the moment there is no reaction from the Government.

"If nothing changes what's going to happen down the line is some of these businesses, particularly in the off-season, are going to lay-off staff, or else they are not going to stay in business.

"Others will go out of business all together.

"It's worth making sure that the sector continues to be vibrant in order that it can continue employing all those people.

"There's no other choice because the tourism season is getting shorter and shorter so businesses won't be able to continue to carrying employees through the quieter months.

"The tourist season used to be ten months. Now at best it's six or seven and that means lost income for retailers.

"The matter is simple. The more cash that residents spend abroad the less comes here in terms of retail. If we haven't got the vibrant tourist economy the scenario is doom-and-gloom.'' He predicted if changes in the duty structure were not made and tourism continued to diminish while overseas spending climbed then off-season hours at many shops would be further reduced and staff would be laid-off.

"Many retailers have gone through a difficult curve for the past four or five years of cutting expenses to get through this.

"In doing that there have been personnel that have had to go but I don't think there have been mass layoffs. It hasn't been drastic but it could become that way.'' Last night Mr. Trimingham said leaders in the sector had recommended to the Government that the duty was removed from apparel, which was now being "seriously considered''.

Fears of lay-offs after overseas spending rise "So many jobs depend on this aspect of retail. Just the four major stores in the city of Hamilton employ more than 700 people. All together about 4,600 residents of Bermuda work in the retail sector.'' He said the duty to import each piece of clothing ranged from 2.25 percent to 22.25 percent, and averaged 17 percent.

"It should be eliminated so the stores can promote duty-free clothes.

"The lower price at which we could then sell clothing to the public would make a very strong duty-free statement and a very big difference to the view for tourists considering Bermuda.

"We think this would be a major step ahead in turning tourism around because the impression would be much broader than just clothing, so it would help tourism as well as retail.'' He said prices of some other goods were already at duty-free levels as suppliers had lowered the wholesale price so retailers could in turn lower the retail price to compete with duty-free countries.

Perfume, china, crystal, cameras, watches and jewellery were widely sold at these lower prices in Bermuda, he said.

"If we could add to that by having a major commodity like clothing tie in with the duty-free-priced merchandise we could promote an overall duty-free image for Bermuda which would attract tourists.

"We have talked to the Government at some length on this and we know they are seriously considering the idea but they have got an overall project of orchestrating a recovery for tourism and this has to fit into that.'' He hesitated to say how much less the public could expect to pay for clothing in general if the duty was removed completely but said it would see "prices go well down across the board''.

Warning of lay-offs: Peter Cooper