Executives of Masters Ltd. and Pearman Watlington & Company Ltd. (PW's) met in New York this weekend with representatives of two major carmakers after the local firms struck a deal that alters the retail landscape. After four months of talks between Masters Ltd. president Ms Susan Wilson, and PW's chief executive Mr. William Cox, PW's will emerge with Masters' automotive division as of January 31 and marine division on January 31. In exchange, Masters will acquire PW's appliance sales division on October 31 and appliance service division on January 31, taking over agency agreements for such household names as Maytag and Jenn-Air. Masters becomes the largest appliance retailer on the Island.

There is an undisclosed amount of cash involved, although Mr. Cox said the the deal was fairly close to a swap of businesses and inventories between the companies. Two PW's sales employees may transfer to Masters while two service people are to be made redundant. PW's will continue with appliance service in the intervening months.

"We want to allow a smoother transition to be sure that we are able to give our customers proper service through the transition and not try to do four major moves at one time,'' Mr. Cox said. "This has also been based on successful negotiations with car agencies in Germany and Japan.'' The deal further underscores the increasing concentration in the local automotive market. The arrangement may leave PW's as one of the top two car dealers and also solidifies its lead position in the marine business. In the deal, PW's adds the German car make Volkswagen and the Japanese Isuzu line to its existing lines of Nissan, Hyundai, Fiat and Rover.

Mr. Cox said the taks began as a result of the construction of the Bull's Head car park near Masters retail outlet and PW's plans for a massive redevelopment of its Waterfront property on Pitts Bay Road.

"Masters have a unique opportunity with all of a sudden having hundreds of cars outside their back door, with the opening of the new (Bull's Head) car park. It's causing a refocus of their business,'' he sad. "And with our development coming on line, it's causing a re-focus of our business. We continued talking with Masters on the automotive side and had reached an agreement in principle, and then started talking about the marine division.

"We have now just completed the acquisition of their marine division, which includes Avon inflatable and hard bottom dinghies and life rafts. We also become a licensed inspection station for personal safety devices, such as life rafts on a boat. "This allows us to expand in the marine division, because one of our areas of weaknesses had been in the inflatable market. Avon is certainly the world's leader in inflatable boats.'' The build-up of Volkswagen cars on Bermuda's roads, however, have not necessarily come from the automotive dealer. And that is something that PW's will seek to change with their assumption of the line. Mr. Cox said: "There are a lot of Volkswagens in Bermuda, but a lot of them have been imported directly by the owners. They are Mexican Volkswagens, not German Volkswagens. We think we can provide a more reasonable alternative to people importing individually.''