Barry’s Jewelers Unveils Bailout Plan : * Retailing: The tentative agreement would give 90% of the company to bondholders.

Barry’s Jewelers, which ran into financial trouble after a rapid expansion in the late 1980s, announced a tentative bailout agreement Thursday under which its bondholders would acquire 90% of the company.

The Monrovia-based retailer--one of the nation’s larger jewelry chains with 146 shops--said the bondholders would also receive $3.75 million in cash in exchange for trading in their $46.5 million in notes.

Barry’s preliminary agreement was reached with its banks and an informal bondholders committee after nearly one year of negotiations. As part of an earlier accord with its banks, the company closed 68 stores this year and cut 350 jobs, leaving it with 1,250 employees in 13 states.

Still, Barry’s plans face some hurdles. The agreement is conditioned on, among other things, the approval of other large bondholders.

In addition, a spokeswoman for Barry’s said other groups--apparently including landlords of the closed stores--conceivably could challenge the agreement. The spokeswoman, however, called it “highly unlikely” that anyone will try to block the deal.

Barry’s president, Terry Burman, expressed optimism about the pact. “We have liquidated 68 unprofitable stores, centralized buying and credit management functions and streamlined our retail management structure,” he said in a news release.

While conceding that the company’s financial results have been “disappointing,” Burman said Barry’s is “already seeing the impact of the actions we have taken. The new agreement with our bondholders and banks will put us in a position to capitalize on our organization restructuring so that we can return to profitability.”

Along with removing the $46.5 million in junk bonds from the company’s balance sheet, the accord calls for paying off Barry’s suppliers fully and in cash.

The agreement would also cancel all of the Barry’s stock, and then would give current shareholders 7% of the shares of the newly restructured company. Another 3% of the reorganized company’s stock would go to senior officers, and the remaining 90% would go to bondholders.

Currently, 77% of the stock is held by Barry’s co-founders, David Blum and Gerson I. Fox, who remain officers of the company. Barry’s stores, which operate under various names across the country, are mainly located in shopping malls. In California, it has such chains as Samuels, Hatfields, The Ringmaker and A. Hirsch & Son.

After acquiring a string of chains in the late 1980s, Barry’s financial problems mounted. In its last fiscal year, which ended May 31, it lost $29.4 million on sales of $140.2 million.