In 1972, Ralli America Inc., a private subsidiary of the British commodities trading firm Ralli International, had a strong desire to become a publicly traded company listed on a U.S. stock exchange.

It also was seeking a stable source of profits to offset the roller-coaster earnings endemic to the volatile commodities business.

Then Anthonie C. van Ekris, the Dutch-born head of Ralli America, found Kay Jewelry Stores Inc.

The Washington-based chain once was the biggest jewelry chain in the nation but by the early 1970s had fallen on hard times. Still, Kay had what van Ekris needed: an American Stock Exchange listing that would give the private trading firm access to U.S. capital markets as well as a stable source of retail earnings if the 120-store chain's fortunes could be turned around.

Van Ekris, then 37 and a commodities trader all his life, said he and his team of importers and traders felt more comfortable moving into the jewelry business than most. Although he'd always dealt in soft commodities -- from coffee beans to vegetable oils -- "commodities traders always are attracted to precious metals." The retail jewelry business seemed a natural.

But C. D. Kaufman, who founded the jewelry chain in 1916, was a proud and stubborn man. He wouldn't merge with the larger, healthier Ralli unless the new company carried the name "Kay" as long as Kaufman was alive. Van Ekris agreed.

The Kay Corp., with headquarters in Alexandria, Va., but substantial executive operations in New York City, came to life in 1972. Van Ekris was, and is, its president and chief executive.

At Kay's birth, Ralli International (which was soon taken over by Bowater Corp., another British firm) owned 70 percent of Kay. But Kay has since bought all the Kay stock owned by the British parent. Today about half the 3 million outstanding shares is owned by management, friends of management or staff, and the rest is in public hands, Van Ekris said in an interview last week.

Kaufman died in 1977. But by then, van Erkis said, the company had its own identity. So the name remains.

So does the seeming corporate schizophrenia. The company has two wholly owned subsidiaries: one concentrates on international commodities trading; the other sells watches, rings and pendants to retail customers across the United States.

Both have expanded rapidly. Revenues, which were $213 million in 1975, were $765 million in 1979 -- the last year for which audited data are available -- and will approach $1 billion in 1980, Van Ekris said. The "international trading side of the business has grown very rapidly," Van Ekris said, while the jewelry side has been growing at a "steady planned rate."

Jewelry accounted for $110 million, or about 14 percent of the company's 1979 sales of $765 million. In 1978, jewelry sales were $88 million, or roughly 19 percent of total sales of $459 million.

Profits are another question, however.

While operating profits in the jewelry business grew from $9.5 million in 1978 to $14.3 million in 1979, higher interest costs hurt the commodities business. Despite a surge in revenues to $665 million from $376 million in 1978, profits after interest expense fell to $5.8 million in 1979 from $6.8 million in 1978.

Overall, when corporate expenses and income taxes are figured in, Kay's net profits rose from $6.4 million ($1.96 a share) in 1978 to $7.8 million in 1979 ($2.41).

But 1980 will be worse. Not only did falling commodities prices and high rates continue to plague the commodities operations, but the recession of 1980 also took its toll on that usually reliable jewelry business, as well, Van Ekris said.

Van Ekris said he expects earnings of about $3 a share in 1980, compared with $2.41 in 1979. But about $1.58 of 1980 profits came from sales of assets acquired in a merger with PVO International Inc., an intenational trading firm. When the assets sale is factored out, profits will decline from 1979.

Balfour Maclaine International Ltd., the principal Kay Corp. subsidiary, deals worldwide in commodities ranging from rubber to tea and spices to frozen meats and oils. Balfour has more than a dozen subsidiary companies, from a Rotterdam coffee importer to a British trading firm dealing in oils and chemicals.

Two years ago Balfour founded a brokerage firm, Balfour Maclaine Inc., to trade commodities futures in New York. Last Wednesday the brokerage subsidiary's just-opened Chicago office executed its first trade on the Chicago Mercantile Exchange and expects to begin trading on the Chicago Board of Trade, the nations's biggest, within a matter of days, Van Ekris said.

Kay Jewelers Inc., the other major subsidiary, operates 240 Kay stores in enclosed shopping malls across the country, leases space in 54 department stores (including Gimbels) selling jewelry as Marcus and Co. Inc., and owns nine Black, Starr & Frost Ltd. jewelry stores. While Kay aims at the middle-class jewelry buyer (engagement and wedding rings are its biggest sellers), Black, Starr & Frost is for the highbrows, a "guild" store in the parlance of the trade.

"Everything in Kay is the real thing, but items can go for as little as $10 up to $5,000," according to Michael Lavington, a 37-year-old Englishman with a doctorate in physics who is president of the jewelry subsidiary in Alexandria. "At Black, Starr & Frost you'll find few items under $100 and one-of-a-kind items that go up to $100,000."

The company, which initially closed 40 of the original 120 stores in the Kay chain and now is adding Kay stores at the rate of 30 to 40 a year, has taken a go-slow attitude on the Black, Starr stores.

Black, Starr & Frost is perhaps the oldest jewelry store in the United States, founded in 1810 at 164 Broadway in lower Manhattan. Kay acquired the name and the one remaining Black, Starr store (the jeweler lost its Fifth Avenue store in the early 1960s) when it bought the Marcus operations in 1973.

While Lavington runs the jewelry operation independently, Van Ekris takes a personal interest in Black, Starr.There are three Black, Starr stores in the Washington area, including the first one Kay opened itself, at White Flint Mall on Rockville Pike. But the company has not yet returned to Fifth Avenue. The rents are too high, Lavington said.

Lavington said the go-slow approach to expanding the high quality jewelry store is over. "We intend to open five or six stores a year now that we feel comfortable with it." Still that is a substantially slower pace than the Kay store operation.

"You can open 30 Kays a year, and if one or two go wrong, it is not a disaster," he said. The Kay stores are smaller -- about 1,000 square feet to the 2,000 to 3,000 needed for a Black Starr -- and require smaller overhead and investment.

While Kay may be best-known to the public for its jewels, commodity trading is the heart of the company's business.

Lavington, one of two executive vice presidents of the company and president of Kay Jewelers Inc., runs the jewelry operation out of the corporation's formal headquarters in Alexandria. But Van Ekris, the trader at heart, spends most of his time in the company's New York offices in lower Manhattan.

Coffee is Kay's mainstay and three operations -- one in Rotterdam and two in New York -- are in the coffee bean trade. But the companies also trade tea and spices, frozen seafood, dried fruits, frozen meat, rubber, fats and oils, sugar and molasses, wood, textiles and the carpet-backing necessary for the manufacture of rugs.

The firm also distributes refrigeration and airconditioning equipment and acts as buying and shipping agent for a number of foreign companies.

Van Ekris said Kay is always in themarket for a "juicy acquisition, such as last year's purchase of PVO International. The company always has displayed a taste for acquisition. It pays cash for what it buys, rather than issuing stock. "We don't want to dilute the value of our stock," Van Ekris avers.

The company also hopes to expand significantly the Balfour Maclaine presence in London which, like New York City and Rotterdam, is a key international trading outposts. "We should be as big or bigger in London as we are in New York," he said.

Kay also wants to become more important as a commodities futures broker, a natural offshoot of the firm's longstanding trading of physical commodities.He said the fledging brokerage firm has made $2 million by concentrating on industrial users of commodities who want to hedge their investment in the futures markets as well as wealthy individuals.

"Buying and selling futures contracts is not for the small investor," Van Ekris claims, although the company is readying a special program for a commodities mutual fund tailored to the needs of the small investors that it will market to brokerage houses soon.

One area the company has not yet entered, and may not for a long time, is the grain trade.

"I don't want to get crushed between Cargill and Continental [grain, the two major, privately owned international grain traders]," he said. Even a billion-dollar company isn't ready for that turf fight.