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                                  EXHIBIT 10.7



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April 7, 2000

Little Switzerland, Inc.
161-B Crown Bay
P.O. Box 930
St. Thomas, U.S. Virgin Islands 00804


Att:     Robert L. Baumgardner, President

         Re:      PROPOSED STANDSTILL THROUGH AUGUST 1, 2000

Dear Mr. Baumgardner:

      Thank you for your letter on behalf of Little Switzerland, Inc. (the
"Company") to The Chase Manhattan Bank dated March 5, 2000. The Chase Manhattan
Bank and the Bank of Nova Scotia (the "Lenders") are pleased to see the
Company's current efforts to address its financing requirements and welcome the
opportunity to review the Company's plans and progress toward achieving its
business plan and obtaining alternative financing from a credible lender. The
Company has represented in our recent discussions that it feels it is necessary
to obtain a fully underwritten commitment for financing by April 15, 2000 and is
diligently working toward meeting this deadline. Based on these representations,
the Lenders generally are amenable to the terms outlined in your March 5 letter
and will agree to standstill until August 1, 2000 (the "Standstill Period"),
subject to the following terms and conditions:

      1.    Upon receipt of this letter, please provide a copy of the letter
            from Investment Bank ("Investment Bank") dated February 15, 2000,
            which has been signed and accepted by the Company by February 15,
            2000 as required therein.

      2.    On or before April 14, 2000, the Company shall execute (or cause one
            or more of its subsidiaries, as appropriate, to execute) in
            recordable form the mortgages over the leasehold real estate in St.
            Thomas and the fee simple real property in St. Maarten owned by the
            Company or such subsidiary(ies) substantially in the form previously
            provided to the Company and its counsel for review. Please note that
            our Virgin Islands counsel has advised us that a recorded mortgage
            can be assigned and modified of record for nominal additional
            recording fees, unless the amount of the mortgage increases in which
            case the fee is based the amount of such increase. Similarly, our
            St. Maarten counsel has advised that the St. Maarten mortgage may



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            be assigned to a new lender relatively inexpensively. Therefore,
            Investment Bank or another lender may obtain and modify the St.
            Thomas and St. Maarten mortgages without causing substantial
            additional mortgage recording fees.

      3.    The Lenders agree that the Company may obtain a bridge loan from
            Investment Bank in an amount not exceeding $2,000,000 (the
            "Investment Bank Loan") for purposes of working capital needed for
            the period prior to the closing of the credit facility (as defined
            below), which bridge loan may be secured by a mortgage over the St.
            Maarten real property superior to the Lenders. Such superior
            mortgage in favor of Investment Bank shall be accomplished in a
            manner satisfactory to Investment Bank, the Lenders, and their
            respective St. Maarten counsel. Upon payment in full of the
            Investment Bank Loan, the mortgage in favor of Investment Bank shall
            be assigned to the Lenders.

      4.    The Company will provide a binding commitment letter, accepted by
            the Company, from Investment Bank or another lender on or before
            April 30, 2000, which commitment letter shall provide for the
            extension to the Company of fully underwritten credit facilities to
            close on or before August 1, 2000 pursuant to commercially
            reasonable terms and conditions, including the payoff of the
            Company's outstanding indebtedness to the Lenders (the "Credit
            Facility").

      5.    In connection with the sale of the Barbados inventory and other
            assets the Company will provide to and obtain from the Government of
            Barbados all documentation necessary to cause the discharge of the
            letters of credit from The Bank of Nova Scotia. As you may be aware,
            even if the Barbados store is sold or closed, the obligations of the
            Bank of Nova Scotia under the Barbados letters of credit remain
            outstanding until officially released by the applicable government
            authority. The Bank of Nova Scotia has the right to request the
            Government of Barbados to cancel the Barbados letters of credit upon
            the sale or closure of the Barbados store or upon the occurrence of
            a Termination Event as described in Paragraph 11 of this letter. All
            proceeds of the sale of the Barbados inventory, store and other
            assets shall be applied to repay the Bridge Loan, with the
            remainder, if any, to be used for working capital.

      6.    The Lenders agree to the reduced minimum inventory collateral
            position of two times the amount of the Company's funded
            indebtedness to the Lenders set forth in your March 5 letter
            provided that such inventory is located in the jurisdictions in
            which the Lenders have a perfected security interest, currently, the
            U.S. Virgin Islands, Alaska, St. Maarten, Aruba and Curacao.

      7.    The Security Agreement dated May 7, 1999 (the "Security Agreement")
            and all security instruments and other documents executed and/filed
            under the laws of any foreign jurisdiction to evidence and/or
            perfect the Lenders' security interest granted under the Security
            agreement shall continue in full force and effect.



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      8.    The Company shall cause its subsidiaries, upon full review of local
            counsel and in no event later than April 30, 2000, to promptly
            execute and deliver any security instrument or other document in
            commercially reasonable form as is provided by the Lenders or their
            counsel and as is necessary to evidence and/or perfect the Lenders'
            security interest in inventory located in any foreign jurisdiction
            in which the lien of the Lenders is not currently perfected.

      9.    The Company shall provide to the Lenders on a weekly basis a
            schedule of inventory by store location. The Company shall further
            provide to the Lenders on a monthly basis no later than the last day
            of the following month copies of its consolidated and consolidating
            reports of operations, including balance sheets, profit and loss
            statements and a narrative review of the monthly operations for the
            prior month. Preliminary year-end financial statements shall be
            provided on or before June 30, 2000.

      10.   During the Standstill Period, the Company shall have no obligation
            to make payments to the Lenders, other than (a) a regularly
            scheduled interest payments; (b) the payment of one-quarter of net
            cash proceeds of transactions as set forth in your March 5 letter,
            except that the transaction period shall cover not only the
            Company's fourth quarter but also so much of the first quarter of
            the following fiscal year that is part of the Standstill Period; and
            (c) payment of all reasonable costs and expenses of the Lenders
            incurred in connection with this letter agreement, the Mortgages,
            the Security Agreement and any collateral documentation filed in or
            executed pursuant to the laws of any jurisdiction in which the
            collateral pledged to the Lenders under the Security Agreement is
            located.

      11.   Notwithstanding the foregoing, the Standstill Period shall terminate
            prior to August 1, 2000, in the even of an earlier Termination
            Event. Each of the following shall constitute a Termination Event:

            a.    The Company shall fail to make any regularly scheduled
                  interest payment when due (subject to any applicable notice
                  and cure periods in the loan documents evidencing and
                  governing the indebtedness of the Company and its subsidiaries
                  to the Lenders), time being of the essence with respect to any
                  and all of such payments.

            b.    The Company or any subsidiary otherwise shall fail to comply
                  with any term of this letter agreement, the Mortgages or the
                  Security Agreement (subject to any applicable notice and cure
                  periods therein).

            c.    The rendition by any court of a final judgment against the
                  Company or any subsidiary in a stated amount in excess of
                  $250,000.00 (or more than one such judgment shall be entered
                  against any one or more of them in an aggregate stated amount
                  in excess of $250,000.00); or the attachment of any property
                  of the Company or any subsidiary not bonded or insured against
                  or remedied within sixty (60) days.


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            d.    The filing of a tax lien against the Company or any subsidiary
                  by the Internal Revenue Service or the taxing authority having
                  authority over the jurisdiction in which any such entity is
                  located no remedied within thirty (30) days.

            e.    The commencement of any action or proceeding against any one
                  or both of the Lenders by the Company or any subsidiary or
                  other entity affiliated with, controlled by or under common
                  control with the Company.

            f.    The commencement of any bankruptcy or insolvency proceeding by
                  or against the Company or any subsidiary.

At any time five (5) days after either of the Lenders shall have made written
demand on the Company following the occurrence of a Termination Event described
in subparagraphs a, b, c or d above, and immediately upon the occurrence of a
Termination Event described in subparagraphs e or f above, each Lender may, at
its option, acting alone or together with the other Lender; (i) terminate the
Standstill Period described above; (ii) declare all amounts outstanding to be
due and payable forthwith, whereupon the same shall be immediately due and
payable forthwith, whereupon the same shall be immediately due and payable; and
(iii) take any other action which the Lenders or either of them deems necessary
or appropriate to collect the outstanding obligations and to enforce the rights
and remedies under the loan documents evidencing and governing the indebtedness
of the Company and its subsidiaries to the Lenders, the Security Agreement, any
document executed or filed in connection with or pursuant to the Security
Agreement, and under applicable law.

      If the Company and its subsidiaries are in agreement with the foregoing,
please sign as indicated below and return a signed original of this letter to
the Lenders.

                                 THE CHASE MANHATTAN BANK

                                 By:      /s/ Roger Odell
                                          -------------------------------
                                          Roger Odell, Managing Director


                                 THE BANK OF NOVA SCOTIA

                                 By:      /s/ Robert Edwards
                                          -------------------------------
                                          Sr. Commercial Banking Manager


The foregoing is acknowledged and agreed to by:

LITTLE SWITZERLAND, INC., a Delaware corporation

By:      /s/ Robert L. Baumgardner
         -------------------------------------------------------------
         Robert L. Baumgardner, President

L.S. WHOLESALE, INC., a Massachusetts corporation


By:      /s/ Robert L. Baumgardner
         -------------------------------------------------------------
         Robert L. Baumgardner, President



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L.S. HOLDING, INC., a U.S. Virgin Islands corporation


By:      /s/ Robert L. Baumgardner
         ------------------------------------------------------------
         Robert L. Baumgardner, President

WORLD GIFT IMPORTS (BARBADOS) LIMITED, a Barbados company


By:      /s/ P.J. Hopper
         ----------------------------------------------------------------------
         Patrick J. Hopper, Director

WORLD GIFT IMPORTS, N.V., a St. Maarten Netherlands Antilles limited liability
company


By:      /s/ P.J. Hopper
         ----------------------------------------------------------------------
         Patrick J. Hopper, Director

S.A.R.L. MONTRES ET BIJOUX, a St. Martin company

By:      /s/ P.J. Hopper
         ----------------------------------------------------------------------

LITTLE SWITZERLAND, N.V., an Aruba limited liability company

By:      L.S. HOLDING (ARUBA), N.V., Managing Director

By:      /s/ Robert L. Baumgardner
         ----------------------------------------------------------------------
         Robert Lee Baumgardner, President of the Managing Board

L.S. HOLDING (ARUBA) N.V., an Aruba limited liability company


By:      /s/ Robert L. Baumgardner
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         Robert Lee Baumgardner, President of the Managing Board

L.S. HOLDING CURACAO, N.V., a Curacao limited liability company


By:      /s/ Robert L. Baumgardner
         ----------------------------------------------------------------------
         Robert L. Baumgardner, President and Managing Director

LITTLE SWITZERLAND (ST. LUCIA) LIMITED, a St. Lucia company


By:
         ----------------------------------------------------------------------


L.S. HOLDING (U.S.A.), INC., an Alaska corporation

By:      /s/ Robert L. Baumgardner
         ----------------------------------------------------------------------
         Robert L. Baumgardner, President