The vote is a foregone conclusion, since stockholders of 70 percent of Kay Jewelers Inc.'s 12.4 million shares outstanding have already agreed by proxy to sell the Alexandria-based company to Britain's Ratners Group PLC.
But today, shareholders of the jewelry chain will meet to officially seal the fate of Kay, finally ending its years of financial turmoil and moving its headquarters out of the Washington area, where it has been since 1974.
"Though it is sad that Kay will be leaving the area, it's also a really good thing for the company in the future," said Kay President Michael Lavington. "This merger will create a company that is much stronger and better able to withstand the difficult economic times ahead."
While it ranked as one of the area's biggest retailers with $426.6 million in revenue last year, its profits did a 98 percent free fall in 1989 to $196,000 from $11 million in 1988.
There have been bumps along the road to this retail salvation for Kay, a company many say could have ended up in bankruptcy. It had been hurt by overexpansion, sagging sales, a heavy debt load and a sluggish economy.
The 500-store chain found a buyer in Britain's largest jewelry retailer in July and agreed to a friendly $328 million takeover.
The deal was almost scotched by a rebellion of Kay bondholders, who were holding more than $100 million of its high-risk junk bonds. Originally offered 75 cents on the dollar, most held out until Ratners upped the ante to 90 cents. Many bondholders may have been made less cooperative by a revelation that Kay Chairman Anthonie van Ekris received a multimillion-dollar consulting contract from Ratners in which he agreed not to compete against the company.
The stock-swap takeover package also may not be worth the $17 a share value promised in July. Kay stock closed yesterday at $12 on the New York Stock Exchange -- an indication that investors don't believe the $17 figure.
The final deal for the company is set to close within a week and the headquarters will be closed by Christmas -- though none of the 500 stores will be affected. Many of Kay's 400 employees at the Northern Virginia headquarters were offered jobs in Ohio at Sterling Inc., Ratners main U.S. subsidiary, where Kay operations will be coordinated. But most people chose to stay in this area, including Lavington himself.
At a recent job fair, sponsored by Kay, employees were almost sanguine about the closing. "We have done better than most, getting good severance and job help," said Sharon Cherry, a human resources specialist at Kay for more than nine years. "Still, I guess a pink slip is a pink slip no matter how easy you make it."