CONSULTING AGREEMENT


     Agreement,  dated as of July 31, 1999,  by and between  FINLAY FINE JEWELRY
CORPORATION at 529 Fifth Avenue,  New York, N.Y.  10017, a Delaware  corporation
(the  "Corporation"),  and BFM Advisors LLC at 40 East 19th Street, New York, NY
10003 (the "Consultant").

     WHEREAS, the Corporation wishes to retain the Consultant and the Consultant
has agreed to undertake and perform the obligations set forth in this Agreement,
subject to the terms hereof.

     NOW, THEREFORE, in consideration of the promises,  covenants and agreements
set forth in this Agreement, the parties agree as follows:

     1. Engagement of Consultant;  Duties.  The  Corporation  hereby engages the
Consultant,  and the  Consultant  agrees to be engaged,  as a consultant  on the
terms and conditions set forth below.  The Consultant  agrees that it will serve
as an independent  contractor,  on a non-exclusive basis, as a consultant to the
Corporation  and its affiliates,  performing  such services,  as the Corporation
shall  reasonably  request,   subject  to  the  direction  and  control  of  the
Corporation's  President and Chief Operating Officer and the Corporation's Board
of Directors.  The Consultant's role is that of a consultant and advisor to, and
not that of a manager or employee of the Corporation.  The Consultant represents
and  warrants  that  it is not  subject  to any  agreement,  covenant  or  legal
restraint which precludes or otherwise  restricts its ability to enter into this
Agreement and perform the services contemplated hereby.

     2. Time. The Consultant will devote, subject to availability, such mutually
agreeable  time to the affairs of the  Corporation  (and its  affiliates)  as is
necessary  to perform the services  contemplated  hereby in a  professional  and
effective manner,  such time not to exceed 250 hours during the term hereof (not
more than 25 hours in any  month).  Consultant  shall not be  required to travel
overseas. Consultant agrees that all of Consultant's services hereunder shall be
performed by Barry D. Scheckner.

     3. Term. The Consultant's  engagement shall commence effective as of August
1, 1999 and shall continue until July 31, 2000 (the "Termination Date").

     4. Compensation.  As compensation for the Consultant's  services hereunder,
the Consultant shall receive a fee of $50,000  ("Compensation"),  payable within
thirty (30) days of the Termination Date to BFM Advisors LLC.

     5. Expense Reimbursement. The Corporation will reimburse the Consultant for
any and all actual preapproved  expenses incident to the Consultant's  rendering
of  services   hereunder  upon   presentation  of  expense   vouchers  or  other
documentation in such detail as the Corporation may from time to time reasonably
require.

     6. Nonsolicitation.  (a) The Consultant agrees that during the term hereof,
it shall  not,  on  behalf  of itself or any  business  it is  interested  in or
associated with, employ or

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otherwise engage,  or seek to employ or engage,  any consultant of or individual
employed by the Corporation, its parent, affiliates or subsidiaries.

     (b) The Corporation  shall be entitled,  in addition to any other right and
remedy it may have, at law or in equity,  to an injunction,  without the posting
of any bond or other security,  enjoining or restraining the Consultant from any
violation or threatened  violation of this Section 6, and the Consultant  hereby
consents  to the  issuance  of such  injunction;  provided,  however,  that  the
foregoing  shall not prevent the Consultant  from contesting the issuance of any
such injunction on the ground that no violation or threatened  violation of this
Section 6 has occurred.

     7.  Confidentiality.  The  Consultant  shall not divulge to anyone,  either
during or at any time after the termination of its  engagement,  any information
constituting  a trade secret or other  confidential  information  acquired by it
concerning the Corporation,  its parent,  affiliates or subsidiaries,  except in
the  performance of its duties  hereunder,  without the prior written consent of
the  Corporation,  or if required by law. The Consultant  acknowledges  that any
such information is of a confidential and secret character and of great value to
the Corporation, and upon the termination of its engagement the Consultant shall
forthwith  deliver up to the  Corporation  all  notebooks  and other data in its
possession relating to the Corporation,  its parent, affiliates, or subsidiaries
as the case may be. The Corporation shall be entitled,  in addition to any other
right and remedy it may have, at law or in equity, to an injunction, without the
posting of any bond or other  security,  enjoining or restraining the Consultant
from any violation or threatened violation of this Section 7, and the Consultant
hereby consents to the issuance of such injunction;  provided, however, that the
foregoing  shall not prevent the Consultant  from contesting the issuance of any
such injunction on the ground that no violation or threatened  violation of this
Section 7 has occurred.

     8.  Severability.  If any provision of this  Agreement  shall be held to be
invalid or unenforceable,  such invalidity or unenforceability shall attach only
to such  provision and shall not affect or render invalid or  unenforceable  any
other provision of this  Agreement,  and this Agreement shall be construed as if
such provision had been drawn so as not to be invalid or unenforceable.

     9. Entire  Agreement,  Etc. This  Agreement  together  with the  Separation
Agreement and Release dated the date hereof between the Corporation and Barry D.
Scheckner (the  "Separation  Agreement and Release") sets forth the parties' and
their affiliates'  final and entire agreement,  and supersedes any and all prior
understandings with respect to its subject matter. This Agreement shall bind and
benefit the parties hereto and their respective  heirs,  successors and assigns,
except as otherwise set forth in this  Agreement.  This Agreement is personal in
nature and none of the  Consultant's  obligations  under this  Agreement  may be
assigned  or  delegated  by the  Consultant.  The  Corporation  may assign  this
Agreement to any affiliate  thereof.  This Agreement shall also be assignable by
the  Corporation or any of its affiliates to any other person in connection with
the sale,  transfer or other disposition of all or a substantial  portion of its
business and assets;  and this Agreement  shall inure to and be binding upon any
successor  to  all  or a  substantial  portion  of  the  business,  or to all or
substantially  all of  the  assets,  of  the  Corporation,  whether  by  merger,
consolidation,  purchase of stock or assets or otherwise.  This Agreement cannot
be  changed,

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waived or terminated  except by a writing  signed by both the Consultant and the
Corporation and shall be governed by, and construed in accordance with, the laws
of the State of New York  applicable to contracts  made and  performed  entirely
within such state.

     10.  Independent  Contractor,  Etc. The parties agree that the  Corporation
shall have no right to control or direct the  details,  manner or means by which
the Consultant  accomplishes the results of the services performed hereunder, it
being  acknowledged that the Consultant shall for all purposes be an independent
contractor of the Corporation. Nothing in this Agreement shall be construed as a
restriction  on the  ability of the  Consultant  (or any  affiliate  thereof) to
obtain  employment  or be  associated  or  affiliated  with a competitor  of the
Corporation in any capacity.

     11.  Counterparts.   This  instrument  may  be  executed  in  two  or  more
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.

     12. Notices. Any notice or other communication  required to or which may be
given  to any  party  hereunder  shall be in  writing  and  shall  be  delivered
personally  to  such  party  (or  the  Secretary  thereof  in  the  case  of the
Corporation)  or if mailed,  by registered or certified mail,  postage  prepaid,
return receipt requested, addressed to such other party at the address first set
forth above and shall be deemed  delivered in all cases upon receipt.  Any party
may change the address to which notices are to be sent by giving  written notice
of any change in the manner provided herein.

     13.  Breach;  Attorneys'  Fees.  In the event  Consultant  or any affiliate
breaches this Agreement or the Separation Agreement and Release, the Corporation
will be entitled to recover or withhold any payment  and/or other  benefits paid
or payable under this Agreement or the  Separation  Agreement and Release and to
obtain all other relief provided by law or equity.  The prevailing  party in any
litigation resulting from any such claim shall be entitled to recover reasonable
attorneys' fees and expenses of litigation from the losing party.

     14.  Captions.  The  descriptive  headings of the several  sections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.









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     IN WITNESS WHEREOF,  the parties hereto have set their hands as of the date
first written above.


                                         FINLAY FINE JEWELRY CORPORATION



                                         By: /s/ Joseph M. Melvin
                                             ---------------------------------
                                             Name:  Joseph M. Melvin
                                             Title: President & COO


                                         BFM ADVISORS LLC



                                         By: /s/ Barry D. Scheckner
                                             ---------------------------------
                                             Name:  Barry D. Scheckner


















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