Bermuda has enough "riches'' to turn five years of near-flat store sales into a booming retail industry, says the woman behind New York's successful South Street Seaport shopping centre.

"There is a very strong market here,'' Ms Diane Melish, principal of the Development Consortium Ltd., told a meeting of the Chamber of Commerce Retail Division yesterday.

Ms Melish was hired by planning and tourism expert Mr. Bert Winterbottom of LDR International to work on breathing new life into historic St. George's.

She spoke after Retail Division head Mrs. Nancy Gosling announced a questionnaire given to merchants had revealed there were a number of issues which must be addressed if the industry was to be "revitalised.'' They included Independence, Customs duties, "restrictive'' Government regulations, crime and theft, Sunday trading, immigration policy, tax relief and the impact of new technology.

Mrs. Gosling said 1994 had proved "another lacklustre year of growth'' in retail sales.

But Ms Melish said: "Bermuda has very special and unique assets and resources and a wealth of recreational and historic attractions. All this provides for a rich environment in which to develop retail activities. Believe me, I've seen few places begin with the resources you have now.'' Addressing Bermuda's seasonal tourism industry, she said: "Six months is a long time for a visitor destination to have. Ski and (US) beach destinations have only three months.'' "A population of 60,000 provides a firm local-resident market plus 600,000 tourists visit the Island every year. They are mainly concentrated between May and October but that adds 20,000 residents each week in that period.'' Ms Melish said it was also vital that new merchants be provided with a "nurturing environment.'' The retail development expert was on the Island as part of the team tasked with reviving the town of St. George's as an historic and retail attraction for locals and tourists.

The Harvard and MIT graduate has also worked on New Orleans' Riverwalk and Washington DC's The Shops.

New York's South Street was successful, she said, because it made shopping "entertainment.'' Unusual arts and craft-type stores had proven just as popular with local residents as they had with out-of-town visitors, she pointed out.

The market centres developed by the company she previously worked for, the Rouse Company, averaged $300-$350 a square foot in sales and over half its sales were generated by local residents, she noted.

The fundamental formula for maximising retail sales is quality of merchandise, store and display design, and increasingly important, good service, she said.

Retailers must also know their market.

"Is the item you are selling important for the shoppers to buy?'' she asked.

"The retail product has to fit tightly with the target market.'' It was important to understand what was currently working in the US: Supermarkets selling more than food, bargain stores, discount warehouses, super-stores selling one kind of item at discount prices. Catalogue shopping was also on the rise and "its potential has not been fully tapped.'' Ms Diane Melish