If you are looking for evidence of optimism in the retail sector in Bermuda, look no further than The Phoenix Stores Ltd.

This month the group announced two strategic moves that will grow its enterprise. It has acquired Kodak Express and will soon amalgamate The Complete Office into its P-Tech store.

The business expansion is a sign of a growing belief that better times are coming for the island’s retail sector

George Grundmuller, president and CEO of Phoenix Stores, acknowledges that the retail sector in Bermuda has been through a tough time since the economic downturn that started in 2008.

“It has been difficult for retailers. We lost six-and-a-half thousand people and the economy nosedived. It was challenging and it was felt throughout the retail sector,” he said. However, he believes things bottomed out last year.

“There was a slight improvement, helped by the America’s Cup.”

The latest expansion of the Phoenix Stores group, announced this month, had a touch of serendipity attached to it.

P-Tech’s photo lab has moved to the former Kodak Express location on the corner of Queen Street and Church Street, where it will operate as P-Tech Photo Solution.

The gap left behind at the rear of the P-Tech store will soon be filled by near neighbour The Complete Office. The Reid Street shop, which sells computers and electronics, is being acquired by P-Tech. The two businesses will merge in the P-Tech space in a move that becomes effective on April 29.

The expansion plans have been in the works for about three months. Mr Grundmuller was first approached to see if he was interested in The Complete Office business, and then a week later was presented with the opportunity to acquire Kodak Express.

“It allowed me to consolidate the film developing, and it freed up 40 per cent of the space in the P-Tech store,” he said.

A big attraction of merging the two electronic stores was the chance to bring the leading brands of Hewlett Packard, Apple and Lenovo, all sold by The Complete Office, under one umbrella with Bose, Sony, GoPro, Samsung and other brands for which P-Tech is already the authorised dealer.

“It’s a good fit for us. The combined company will be stronger. We have all the top brands under one roof,” said Mr Grundmuller.

He does not foresee any job losses as a result of the acquisition. On the contrary, he is keen to have the experienced employees from The Complete Office as part of the expanded P-Tech team.

“It was always the objective to keep the staff,” he said. “They have a good business and were successful in the past. A large part of that success is the people that worked there.

“The staff from Complete Office bring a wealth of knowledge, and we want them to pass that knowledge along to customers and colleagues.”

P-Tech is also acquiring iClick as part of the deal. However, the iClick store will stay in its present location on Reid Street and trade under its current name.

The other part of the expansion, the acquisition of Kodak Express, is an interesting one given the way digital photography has all but eclipsed traditional photograph printing.

Mr Grundmuller explained there is still a viable business model in the photographic business. Some customers still want a physical photograph as a small memento, or a larger print for their home.

But there are commercial opportunities too, with businesses, particularly smaller companies that cannot afford their own printing machines, seeking orders for posters, advertising signs and large canvas prints. This is a market P-Tech Photo Solution will seek to serve.

While Mr Grundmuller has a generally positive outlook on prospects for the retail sector in Bermuda, he recognises there are plenty of challenges. One is the impact of online shopping, led by major players such as Amazon, Walmart and eBay.

“Retail is dramatically changing around the world with more and more people shopping online. That is challenging for Bermuda retailers.”

However, he said customers should pay attention to the actual cost of buying online, not just the purchase price for the item on a website. Once shipping, taxes, and customs duty are factored in the item might cost as much, or more, than a similar purchase on island.

Speaking ahead of today’s budget, Mr Grundmuller said he hoped the payroll tax concession that covers retailers will be extended for another year.

Qualifying his view that the fall in the retail sector has bottomed out, he said increases shown in consumer spending data were limited to only a few categories.

“Retail has a long way to go to get back to where it was in 2008,” he said, adding that he would also like to see a retention of a tax break connected to store investments and refurbishments.

The Phoenix Stores group includes a string of pharmacies, including the flagship Phoenix Centre, Brown & Co store, Phoenix Kidz and The Annex Toys.

When asked about the success of the business, Mr Grundmuller said its foundation was a focus on customer service, together with competitiveness, cost-cutting and constantly evaluating the services the group offers.

“We have a great team of people working for Phoenix Stores and we give it our best every day.”

Looking to the future, he anticipates continuing improvements within the retail sector this year and in 2017 with a further boost expected from the final races of the America’s Cup contest.