Document:

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                                  EXHIBIT 10.16

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                                                                  EXECUTION COPY

                              CONSULTING AGREEMENT

       This Consulting Agreement (this "Agreement") is entered into and
effective as of January 15, 2001 (the "Effective Date"), by and between Little
Switzerland, Inc., a Delaware corporation (the "Corporation"), with its
principal executive offices located at 161-B Crown Bay Cruise Ship Port, St.
Thomas, U.S.V.I. 00804, and Jewelcor Management, Inc., a Nevada corporation (the
"Independent Contractor"), with its principal executive offices located at 100
North Wilkes-Barre Boulevard, Wilkes-Barre, Pennsylvania 18702.

                                    RECITALS

       WHEREAS, the Independent Contractor has previously provided to the
Corporation, and it is contemplated that it will continue to provide to the
Corporation in the future, significant consulting services of substantial
benefit to the Corporation and its shareholders; and

       WHEREAS, the Corporation and the Independent Contractor desire to
formalize their existing understandings and agreements with respect to the
consulting services heretofore and hereafter provided by the Independent
Contractor; and

       WHEREAS, the Corporation desires to compensate the Independent Contractor
for its services to the Corporation and for the continued retention of the
Independent Contractor to be available to act as a consultant to assist in
developing and assist in implementing a strategic plan for the Corporation and
for other related consulting services to which the parties may agree, as
described in SCHEDULE A attached hereto and incorporated herein by reference
(the "Services"); and

       WHEREAS, the Independent Contractor agrees to accept the compensation
provided for in this Agreement and to perform the Services for the Corporation
under the terms and conditions set forth in this Agreement, it being expressly
understood that the Independent Contractor shall perform Services as an
independent contractor and nothing contained herein shall be construed to be
inconsistent with this relationship or status;

       NOW, THEREFORE, for and in consideration of the mutual promises and
covenants set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Corporation and the Independent Contractor hereby agree as follows:

<PAGE>

                                    SECTION ONE

            Representations and Warranties of the Independent Contractor

       The Independent Contractor represents, warrants, covenants and agrees
that:

      (a)    the Independent Contractor is a corporation duly organized,
             validly existing and in good standing under the laws of the
             State of Nevada and is duly qualified and in good standing as a
             foreign corporation in each jurisdiction where its performance
             of Services requires such qualification (except where the
             failure to so qualify would not have a material adverse effect
             on the ability of the Independent Contractor to perform such
             Services);

      (b)    the Independent Contractor has all necessary corporate power and
             authority to execute and deliver this Agreement and to perform all
             of its obligations under this Agreement;

      (c)    this Agreement has been duly and validly authorized, executed and
             delivered by the Independent Contractor, and constitutes the valid
             and binding obligation of the Independent Contractor, and is
             enforceable against the Independent Contractor in accordance with
             its terms; and

      (d)    the execution, delivery and performance by the Independent
             Contractor of this Agreement does not (1) violate or conflict
             with any provision of the Independent Contractor's charter or
             by-laws; (2) violate, conflict with, or result in a breach or
             termination of (or require any consent or approval under) any
             agreement, license, arrangement or understanding, whether
             written or oral, to which the Independent Contractor or its
             agents or employees (or any one of them) in said capacity is a
             party; or (3) violate any law, judgment, decree, order, rule or
             regulation applicable to the Independent Contractor or its
             agents or employees (or any one of them) in said capacity.

                                    SECTION TWO

                 Representations and Warranties of the Corporation

       The Corporation represents, warrants, covenants and agrees that:

      (a)    the Corporation is a corporation duly organized, validly
             existing and in good standing under the laws of the State of
             Delaware;

      (b)    the Corporation has all necessary corporate power and authority to
             execute and deliver this Agreement and to perform all of its
             obligations under this Agreement;

      (c)    this Agreement has been duly and validly authorized, executed and
             delivered by the Corporation, and constitutes the valid and binding
             obligation of the Corporation, and is enforceable against the
             Corporation in accordance with its terms; and

      (d)    the execution, delivery and performance by the Corporation of
             this Agreement does not (1) violate or conflict with any
             provision of the Corporation's Certificate of Incorporation or
<PAGE>

             by-laws; (2) violate, conflict with, or result in a breach or
             termination of (or require any consent or approval under) any
             agreement, license, arrangement or understanding, whether
             written or oral, to which the Corporation is a party; or (3)
             violate any law, judgment, decree, order, rule or regulation
             applicable to the Corporation.

                                   SECTION THREE
                               Nature of the Services

       In accordance with the terms and conditions of this Agreement, the
Independent Contractor shall, to the extent requested from time to time by the
Corporation, continue to perform consulting Services for the benefit of the
Corporation with respect to all matters relating to or affecting all items set
forth in SCHEDULE A attached hereto. The Independent Contractor shall perform
such additional Services as may be agreed to by both parties from time to time
in writing, which, when so agreed, shall be deemed incorporated into this
Agreement. The Independent Contractor shall perform Services at the direction of
the President and Chief Executive Officer of the Corporation (or another senior
executive officer of the Corporation as may be designated from time to time by
the Board of Directors of the Corporation). As a part of the Independent
Contractor's Services, the Independent Contractor shall, among other things,
review, analyze, and make suggestions to the Corporation regarding all matters
included in SCHEDULE A attached hereto. The Independent Contractor agrees and
stipulates that this Agreement is a personal service contract under which
Services shall be performed by particular agents and employees of the
Independent Contractor who are subject to the approval of the Corporation from
time to time. The Corporation initially approves Seymour Holtzman, Richard L.
Huffsmith, Barry J. Booth, Jeffrey M. Unger, David Tarantini, Joseph F.
Litchman, and Brian A. Bufalino, together with support staff directly reporting
to and under the personal supervision of such individuals as required for such
Services, as individuals to perform Services hereunder. The Independent
Contractor shall furnish the Corporation with a properly completed Request for
Taxpayer Identification Number and Certification on Form W-9, upon receipt of
said Form W-9 from the Corporation.

                                    SECTION FOUR
                                    Compensation

       4.1 Subject to the provisions of this Section 4, the consideration to the
Independent Contractor from the Corporation (a) for the Services previously
rendered to the Corporation by the Independent Contractor under this Agreement
shall consist of 307,692 shares of the Corporation's Common Stock, par value
$.01 per share ("Common Stock"), which shares shall be fully vested, fully paid
and non-assessable on the date of issuance thereof (but bearing appropriate
restrictive legends); (b) in respect of future Services rendered after the date
hereof, such additional amounts, if any, as may be approved from time to time by
the Board of Directors of the Corporation which shall be reflected in invoices
furnished to the Corporation by the Independent Contractor in accordance with
Section 4.3, payable by the Corporation, at its election, in the form of cash
payments or vested, fully paid and non-assessable shares of Common Stock
(bearing appropriate restrictive legends), in lieu of cash payments, equal in
value to such cash payments); and (c) the reimbursement of actual and direct
<PAGE>

out-of-pocket expenses incurred by the Independent Contractor in the rendering
of Services under this Agreement (including expenses previously incurred).

       4.2  [Intentionally Omitted.]

       4.3 Following the Effective Date, within fifteen (15) days following the
end of each calendar month during the term of this Agreement in which the
Independent Contractor has performed services for which it may receive
additional compensation as contemplated by Section 4.1(b) above, the Independent
Contractor shall furnish the Corporation with an invoice with respect to the
month then ended. If the Corporation elects to pay the Independent Contractor
with shares of Common Stock in respect of Services in any month, then the number
of shares of Common Stock so issued shall be determined using the closing price
of Common Stock as reported by the NASD OTC Bulletin Board Services (or any
other national securities exchange or trading system on which shares of Common
Stock are then traded) on the fifteenth (15th) day of the month following the
month in which such Services were rendered. Notwithstanding anything in this
Section 4.3 to the contrary, no future services shall be provided by the
Independent Contractor without the prior approval of the Corporation.

       4.4 (a)   The Services provided and to be provided by the Independent
Contractor to the Corporation include strategic business and financial advice
and analysis regarding strategic business or financial transactions that may be
considered by the Corporation from time to time. In consideration of such
Services, the Independent Contractor shall be entitled to receive, in addition
to the consideration otherwise provided for in Section 4.1 above, an additional
payment (the "Transaction Fee") contingent upon the consummation of any
Transaction (as defined below) during the term of this Agreement or within six
(6) months thereafter.

            (b)   The Transaction Fee shall be payable in cash in an amount
equal to one percent (1%) of the Transaction Value of any such Transaction.

            (c)   As used herein, the term (i) "Transaction" means (v) the sale
or issuance, directly or indirectly, to one or more third parties in a single
transaction or a series of related transactions of securities of Little
Switzerland representing fifty percent (50%) or more of the combined voting
power of the Company's then outstanding securities (it being understood that the
foregoing shall not include a rights offering by the Company of equity
securities on a pro rata basis to its existing shareholders); (w) the sale,
transfer or other disposition of all or substantially all of the assets of the
Company to another person or entity; (x) the shareholders of Little Switzerland
approve a plan of complete liquidation of Little Switzerland; (y) the merger,
consolidation or other business combination of Little Switzerland with any
corporation or entity, other than (1) a merger or consolidation which would
result in the voting securities of Little Switzerland outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of Little
Switzerland or such surviving entity outstanding immediately after such merger
or consolidation or (2) a merger or consolidation effected to implement a
recapitalization of Little Switzerland (or similar
<PAGE>

transaction) in which no person acquires more than fifty percent (50%) of the
combined voting power of Little Switzerland's then outstanding securities; or
(z) the sale or issuance, directly or indirectly, by the Company to one or more
third parties in a single transaction or a series of related transactions of
debt and/or equity securities of Little Switzerland, the proceeds of which are
to be used to pay off or otherwise retire in full the Company's existing
indebtedness to The Chase Manhattan Bank and The Bank of Nova Scotia and (ii)
"Transaction Value" means the fair market value of all consideration paid or
payable by the Corporation or its shareholders or affiliates, or to the
Corporation or its shareholders or affiliates, in respect of such Transaction,
including without limitation (A) cash, (B) the principal amount of any notes or
other indebtedness issues, (C) the fair market value of any capital stock or
securities, assets or rights (including, among other things, any assets
contributed or transferred to any joint venture or otherwise), (D) the amount of
any liabilities or debt assumed, paid or forgiven in connection with such
Transaction or remaining on the balance sheet of the business or business entity
acquired in or surviving such Transaction and (E) the present value of any
contingent payments in connection with such transaction, assuming satisfaction
or achievement in full of any future conditions or criteria for full payment
thereof, discounted at a rate of nine percent (9%) per annum.

       4.5 Subject to Section 16 hereof, the Corporation shall reimburse the
Independent Contractor, within thirty (30) days following receipt of
documentation that satisfies the Corporation's travel and expense reimbursement
policies, an amount in cash equal to the actual and direct cost of all
reasonable out-of-pocket expenses incurred by the Independent Contractor in the
rendering of Services under this Agreement. The Independent Contractor hereby
acknowledges that it has received in writing, read and understands the
Corporation's travel and expense reimbursement policies in effect as of the
Effective Date.

                                    SECTION FIVE
                                      Duration

       The term of this Agreement shall continue until January 31, 2002 (the
"Expiration Date"); PROVIDED, HOWEVER, that either party hereto may terminate
this agreement upon thirty (30) days prior written notice to the other party.
The provisions of Sections 4.3, 4.4, 12, 13 and 14 hereof shall survive any such
expiration or termination of this Agreement.

                                    SECTION SIX
                                Complete Performance

       The Independent Contractor agrees to fully perform its Services
throughout the term of this Agreement and further agrees to perform such
Services in a manner that fulfills the spirit and purpose of this Agreement. For
the purposes of this Section 6 only, it shall be assumed by the parties that any
further compensation to be paid to the Independent Contractor for its Services
from the Effective Date through the Expiration Date is earned at the per diem
rate of $666.00 (the "Per Diem Rate"). If the Independent Contractor were to
fail or refuse to completely perform its services hereunder as a result of or
based upon circumstances that are within the Independent Contractor's control,
the Corporation shall be entitled, upon written demand (the "Make-Whole
Notice"), to receive from
<PAGE>

the Independent Contractor 150% of the Per Diem Rate to have been earned by the
Independent Contractor from the date of such Make-Whole Notice to the Expiration
Date.

                                   SECTION SEVEN
                                   Place of Work

       It is understood that the Services shall be rendered primarily from the
Independent Contractor's offices in Wilkes-Barre, Pennsylvania, and Boca Raton,
Florida, but that any approved agent or employee of the Independent Contractor
shall, upon request by the Corporation and reimbursement by the Corporation for
the cost thereof, travel to the Corporation's executive offices located at
Charlotte Amalie, St. Thomas, U.S.V.I. or such other places as may be reasonably
designated by the Corporation.

                                   SECTION EIGHT
                                Time Devoted To Work

       In performing the Services, the hours that approved agents and employees
of the Independent Contractor work on any given day shall be entirely within the
Independent Contractor's control and the Corporation shall rely upon the
Independent Contractor to determine the number of hours reasonably necessary to
fulfill the spirit and purpose of this Agreement.

                                    SECTION NINE
                          Status of Independent Contractor

       The Independent Contractor and the Corporation acknowledge and agree that
the Independent Contractor shall perform the Services hereunder as an
"independent contractor" and not as agent or employee of the Corporation, and
nothing herein shall be construed to be inconsistent with this relationship or
status. The Independent Contractor and its agents and employees shall have no
express or implied authority to act for, represent, bind or obligate the
Corporation in any manner whatsoever. Accordingly, except as set forth in
Section 4.1(d), it is expressly understood and agreed between the parties hereto
that the Independent Contractor is solely responsible for all labor and expenses
in connection with the performance of every obligation of the Independent
Contractor hereunder. The Independent Contractor assumes the responsibility for
furnishing the Services hereunder and shall withhold and pay when due all
employment taxes required by federal, state and local laws, including, without
limitation, all social security and withholding taxes, and contributions for
unemployment and compensation funds. The Independent Contractor acknowledges and
understands that the Corporation will not maintain worker's compensation, health
or liability insurance on behalf of the employees or agents of the Independent
Contractor.

                                    SECTION TEN
                              Materials and Equipment

       Except as provided herein, the Independent Contractor shall furnish, at
its own expense, all materials and equipment necessary to carry out the terms of
this Agreement.
<PAGE>

                                   SECTION ELEVEN
                                   Work Standards

       The Independent Contractor shall adhere to professional standards and
shall perform all Services required under this Agreement in a manner consistent
with generally accepted procedural standards.

                                   SECTION TWELVE
                               Copyrights and Patents

       The Corporation shall own all copyrights and/or patents developed by the
Independent Contractor while performing the Services provided under this
Agreement. All improvements, discoveries, ideas, inventions, concepts, trade
names, trademarks, service marks, logos, processes, products, computer programs
or software, subroutines, source codes, object codes, algorithms, machines,
apparatuses, items of manufacture or composition of matter, or any new uses
therefor or improvements thereon, or any new designs or modifications or
configurations of any kind, or work of authorship of any kind, including,
without limitation, compilations and derivative works, and techniques (whether
or not copyrightable or patentable) conceived, developed, reduced to practice or
otherwise made by the Independent Contractor, or any of the Independent
Contractor's agents or employees, and in any way related to the rendering of
Services under this Agreement, shall become property of the Corporation. The
Independent Contractor agrees to assign, and hereby does assign (and hereby
agrees to use its best efforts to causes its agents and employees to assign), to
the Corporation any and all copyrights, patents and proprietary rights in any
such invention to the Corporation, together with the right to file and/or own
wholly without restrictions applications for United States and foreign patents,
trademark registration and copyright registration and any patent, or trademark
or copyright registration, issuing thereon.

                                  SECTION THIRTEEN
                      Privileged and Confidential Information

       13.1 The Corporation and the Independent Contractor acknowledge that the
Corporation has acquired and developed, and will continue to acquire and
develop, information related to its business and its industry which is secret
and confidential in character and is and will continue to be of great and unique
value to the Corporation and its subsidiaries and affiliates. The term
"confidential information" as used in this Agreement shall mean all trade
secrets, proprietary information and other data or information (and any tangible
evidence, record or representation thereof), whether prepared, conceived or
developed by an employee of the Corporation or received by the Corporation from
an outside source (including the Independent Contractor), which is in the
possession of the Corporation, which is maintained in confidence by the
Corporation or any subsidiary or affiliate of the Corporation or which might
permit the Corporation or any subsidiary or affiliate of the Corporation or any
of their respective customers to obtain a competitive advantage over competitors
who do not have access to such trade secrets, proprietary information, or other
data or information, including, without limitation, information concerning the
Corporation's product line plans, store and brand image and trade dress
developments and strategies, business plans, real estate leasing terms,
conditions and plans, occupancy costs, customers, suppliers, designs,
advertising plans, marketing plans, merchandising plans, market studies
<PAGE>

and forecasts, competitive analyses, pricing policies, employee lists, and the
substance of agreements with landlords, tenants, subtenants, customers,
suppliers and others. The term "confidential information" also includes
information that the Corporation has in its possession from third parties, that
such third parties claim to be confidential or proprietary, and which the
Corporation has agreed to keep confidential. However, the term "confidential
information" as used in this Agreement shall not include information that is
generally known to the public or in the trade or has been disclosed by the
Corporation in a press release or in a filing by the Corporation with the U.S.
Securities and Exchange Commission. The Independent Contractor shall keep and
maintain all confidential information in complete secrecy, and shall not use for
itself or others, or divulge to others, any knowledge, data or other information
relating to any matter which is confidential information relating to the
Corporation obtained by the Independent Contractor as a result of its Services,
unless authorized in writing by the Corporation in advance of such use or
disclosure. All written information made available to the Independent Contractor
by the Corporation, which concerns the business activities of the Corporation,
shall be the Corporation's property and shall, if requested in writing by the
Corporation, be delivered to it on the termination or expiration of this
Agreement.

       13.2 The Independent Contractor acknowledges that money alone will not
adequately compensate the Corporation for breach of any confidentiality
agreement herein and, therefore, agrees that in the event of the breach or
threatened breach of such agreement, in addition to other rights and remedies
available to the Corporation, at law, in equity or otherwise, the Corporation
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms hereof, and such rights and remedies shall be
cumulative.

                                  SECTION FOURTEEN
                                  Indemnification

       14.1 The Independent Contractor shall defend, indemnify and hold harmless
the Corporation (including, without limitation, the Corporation's successors,
assigns, subsidiaries, affiliates and contractors and their respective officers,
directors, employees, agents and other representatives) from and against all
liabilities, losses, claims, actions, damages, expenses (including but not
limited to reasonable attorneys' fees), suits and assessments (whether proven or
not) based upon or arising out of damage or injury (including death) to persons
or property caused by the Independent Contractor in connection with the
performance of Services, or based upon any violation of any applicable statute,
law, ordinance, code or regulation by the Independent Contractor. The
Independent Contractor shall also defend, indemnify and hold harmless the
Corporation against all liability and loss in connection with, and shall assume
full responsibility for, payment of all federal, state, or local income taxes
imposed or required under applicable laws with respect to Services performed and
compensation paid the Independent Contractor under this Agreement.

       14.2 Notwithstanding anything contained in the preceding paragraph, the
Corporation shall defend, indemnify and hold harmless the Independent Contractor
(including, without limitation, the Independent Contractor's successors,
assigns, subsidiaries, affiliates and contractors and their
<PAGE>

respective officers, directors, employees, agents and other representatives)
from and against all liabilities losses, claims, actions, damages, expenses
(including but not limited to reasonable attorneys' fees), suits and assessments
(whether proven or not) based upon or arising out of damage or injury (including
death) to persons or property caused by the Corporation in connection with the
Corporation's performance of its obligations under this Agreement (including,
but not limited to, claims based upon the material supplied to the Independent
Contractor by the Corporation and utilized by the Independent Contractor in
performing the Services), or based upon any violation of any applicable statute,
law, ordinance, code or regulation by the Corporation.

                                  SECTION FIFTEEN
                                Compliance with Laws

       The parties agree that all obligations to be performed by the parties
under this Agreement shall be performed in compliance with all then applicable
federal, state and local laws and regulations.

                                  SECTION SIXTEEN
                                     Approvals

       16.1 In addition to approvals required by other Sections of this
Agreement, the Independent Contractor shall seek to obtain the Corporation's
written approval in advance of all expenditures in excess of four thousand
dollars ($4,000.00) incurred in connection with the rendering of Services and
for which the Independent Contractor seeks reimbursement from the Corporation.
In addition, all estimates presented to the Corporation by the Independent
Contractor for the Corporation's consideration and/or approval shall be
carefully prepared and shall be based upon reasonable assumptions using the
Independent Contractor's best judgment.

       16.2 All approvals by the Corporation must be in writing and shall be
sought from the President and Chief Executive Officer of the Corporation, or
such other person that the Board of Directors may designate in writing from time
to time. As of the date of this Agreement the President and Chief Executive
Officer of the Corporation is Robert L. Baumgardner. If the Corporation fails to
approve in writing any matter submitted for approval within fifteen (15) days
from the date of its submission, then the matter submitted for approval shall be
deemed to be disapproved.

                                 SECTION SEVENTEEN
                                      Notices

       All notices and other communications required or permitted to be given
under this Agreement by one party to another shall be in writing and the same
shall be deemed effective when delivered (i) in person, (ii) by United States
certified or registered first class or priority mail, return receipt requested,
(iii) by nationally recognized overnight delivery or courier service, or (iv) by
facsimile transmission (340-774-9900) for the Corporation, and 570-820-7014 for
the Independent Contractor), and addressed to the party's principal executive
offices set forth on page one of this Agreement, or at such other address or
facsimile telephone number
<PAGE>

as may be designated in writing by such party to the other in accordance with
the requirements of this Section 17.

                                  SECTION EIGHTEEN
                                   Governing Law

       The place of this Agreement, its situs, or forum is at all times in the
County of New Castle, State of Delaware, in which County and State all matters,
whether sounding in contract or in tort relating to the validity, construction,
interpretation, and enforcement of this Agreement, shall be determined. This
Agreement shall be construed and enforced according to the laws of Delaware
without regard to its principles of conflicts of laws. Any action on this
Agreement or arising out of its terms and conditions shall be instituted and
litigated in the courts of the State of Delaware. Accordingly, the parties
submit to the jurisdiction of the courts of the State of Delaware. The
prevailing party in any such litigation shall be entitled to recover its
reasonable attorneys' fees in addition to any damages that may result from a
breach of this Agreement.

                                  SECTION NINETEEN
                                   Miscellaneous

       This Agreement may not be modified, amended, or waived, except by a
writing executed by both parties hereto. This Agreement, and all attached or
referenced schedules, exhibits and attachments, constitutes the full and entire
understanding and agreement between the two parties with regard to the subject
matter hereof and supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter. The section headings herein are
for convenience of reference only, are not part of this Agreement and shall have
no effect on the interpretation of this Agreement or the provisions hereof.
Neither this Agreement nor any interest therein, or claim thereunder, shall be
assigned or transferred by the Independent Contractor to any party or parties.
If any provision of this Agreement shall to any extent be invalid or
unenforceable, such invalid or unenforceable provision shall be reformed to the
extent required to make it valid and enforceable to the maximum extent possible
under law, and the remainder of this Agreement shall not be affected thereby,
with each provision hereof being valid and enforceable to the fullest extent
permitted by law. This Agreement shall be binding upon, and inure to the benefit
of, the parties and their respective successors and permitted assigns. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
Agreement.

                                   [END OF TEXT]

<PAGE>

       IN WITNESS WHEREOF, the parties have signed, sealed and delivered this
Consulting Agreement in duplicate, each of which is deemed an original, as of
the Effective Date.

ATTEST:                             LITTLE SWITZERLAND, INC.

__________________________    By:  /s/ Robert L. Baumgardner
                                   --------------------------------------
                                                (SIGNATURE)
                                        Name:  Robert L. Baumgardner
                                        Title: President

ATTEST:                             JEWELCOR MANAGEMENT, INC.

___________________________         By:  /s/ Seymour Holtzman
                                         ---------------------------------
                                                (SIGNATURE)
                                        Name: Seymour Holtzman
                                        Title: Authorized Signatory

<PAGE>

                                                                      SCHEDULE A

                              Consulting Agreement
                                     Between
                            JEWELCOR MANAGEMENT, INC.
                                       And
                            LITTLE SWITZERLAND, INC.

                                   Dated as of
                                January 15, 2001

                                    SERVICES

       The services to be performed by the Independent Contractor are to assist
in developing and assist in implementing a strategic operating plan, which
assistance shall include:

      (a)    assist in seeking to reduce operating expenses and overhead;

      (b)    assist in merchandising, budgeting, financing, real estate,
             insurance, corporate development and investor relations;

      (c)    assist in seeking to identify and hire certain management level
             employees;

      (d)    assist in analysis and negotiation of business relationships;

      (e)    assist in analysis, drafting and negotiation of arrangements
             with certain executive officers and others;

      (f)    strategic business and financial advice in connection with any
             potential acquisition, disposition, business combination or other
             significant corporate business or financial transaction (including
             restructuring advice in connection with the Corporation's existing
             secured debt); and

      (g)    such other services as the Board of Directors may reasonably
             request from time to time.<PAGE>

                                  EXHIBIT 10.17

<PAGE>

September 1, 1999

Patrick Heron II
7 Pawnwood Road
Newton, CT  06482

Dear Patrick:

We are happy to confirm our offer of employment to you to join Little
Switzerland, Inc. as our new Watch Buyer/D.M.M. The guidelines below would
indicate the terms and conditions in which this offer applies.

1).   Your base salary will be $125,000 per annum.

2).   You will be eligible for a (year-end) bonus opportunity that is equivalent
      to 10% of your base salary or ($12,500) which can be earned by achieving
      certain goals that will be determined at a later date.

3).   You will receive stock options in the amount of 25,000 shares that will
      be locked in at the current price upon contract signing (example 25,000
      x 0.60 each).  *Pending approval by Little Switzerland, Inc. Board of
      Directors.

4).   Little Switzerland agrees to prepay for your relocation upon submission of
      not less than two estimates from moving companies. The moving company
      designated will be at the sole discretion of Little Switzerland, Inc.

5).   You are entitled to receive a monthly housing allowance of $1,000.00
      per month through December 31, 1999.

6).   You will be eligible to receive all additional employee benefits as
      outlined in the new employee handbook i.e. (Medical, Dental, Life
      Insurance, etc.). You can contact Correta Bostic, Human Resources Manager
      some time next week to go over the details. She can be reached at (340)
      776-2010.

7).   Your agreed upon start date will be on or before September 20, 1999.
      Should your present employer not accept your two-week notice your presence
      would be welcome sooner.

8).   Please contact Kevin Waters, Executive Vice President, The Primary Group
      to confirm your start date once you've tendered your resignation. He can
      be reached at (407) 568-4111.

<PAGE>

                            LITTLE SWITZERLAND, INC.
                                  P.O. BOX 930
                             ST. THOMAS, USVI. 00804
                                 (340) 776-2010

       Signing and returning this employment offer will constitute a binding
agreement between yourself and Little Switzerland, Inc. Please fax back to Kevin
Waters @ (407) 682-3321.

Sincerely,

 /s/ Robert L. Baumgardner                                  9/1/99
---------------------------------------                     ------------------
Robert L. Baumgardner, President/CEO                        Date

 /s/ Patrick Heron II                                       9/1/99
---------------------------------------                     ------------------
Patrick Heron II                                            Date

<PAGE>

                            LITTLE SWITZERLAND, INC.
                                  P.O. BOX 930
                             ST. THOMAS, USVI. 00804
                                 (340) 776-2010

ADDENDUM

9).   Little Switzerland, Inc. agrees to enter into an employment contract
      for a period of one year from date contract is executed.  In the event
      your position is eliminated, without cause, we agree to compensate you
      for the agreed upon salary plus bonus on a pro-rata basis for the
      remainder of your employment period.

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