================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

             _X_  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended April 29, 2000
                                                 --------------

                                       or

             ___  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                  For the Transition Period from _________ to __________

                         Commission File Number: 0-25716

                            FINLAY ENTERPRISES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                             13-3492802
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)



              529 Fifth Avenue, New York, NY                   10017
         ----------------------------------------            ----------
         (Address of principal executive offices)            (zip code)

                                 (212) 808-2800
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                           Yes  _X_                  No ___

As of June 9, 2000, there were 10,421,953 shares of common stock, par value $.01
per share, of the Registrant outstanding.

<PAGE>


                             FINLAY ENTERPRISES, INC

                                    FORM 10-Q

                      QUARTERLY PERIOD ENDED APRIL 29, 2000

                                      INDEX

                                                                         PAGE(S)

PART I - FINANCIAL INFORMATION

         Item 1.    Consolidated Financial Statements (Unaudited)

                    Consolidated Statements of Operations for the
                    thirteen weeks ended May 1, 1999 and
                    April 29, 2000 ..........................................  1

                    Consolidated Balance Sheets as of
                    January 29, 2000 and April 29, 2000 .....................  2

                    Consolidated Statements of Changes in
                    Stockholders' Equity for the year ended
                    January 29, 2000 and thirteen weeks ended
                    April 29, 2000 ..........................................  3

                    Consolidated Statements of Cash Flows for the
                    thirteen weeks ended May 1, 1999 and
                    April 29, 2000 ..........................................  4

                    Notes to Consolidated Financial
                    Statements ..............................................  5

         Item 2.    Management's Discussion and Analysis of
                    Financial Condition and Results of Operations ........... 10

         Item 3.    Quantitative and Qualitative Disclosures
                    about Market Risk ....................................... 15


PART II - OTHER INFORMATION

         Item 6.    Exhibits and Reports on Form 8-K ........................ 16

SIGNATURES .................................................................. 17

<PAGE>


PART I - FINANCIAL INFORMATION
  ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                            FINLAY ENTERPRISES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                   (UNAUDITED)

                                                        THIRTEEN WEEKS ENDED
                                                    ---------------------------

                                                      MAY 1,          APRIL 29,
                                                       1999             2000
                                                    -----------     -----------

Sales ..........................................       $168,379        $178,614
Cost of sales ..................................         81,919          87,336
                                                    -----------     -----------
    Gross margin ...............................         86,460          91,278
Selling, general and administrative expenses ...         79,904          82,736
Depreciation and amortization ..................          4,200           4,204
                                                    -----------     -----------
    Income (loss) from operations ..............          2,356           4,338
Interest expense, net ..........................          7,006           6,897
                                                    -----------     -----------
    Income (loss) before income taxes ..........         (4,650)         (2,559)
Provision (benefit) for income taxes ...........         (1,562)           (787)
                                                    -----------     -----------
    Net income (loss) ..........................        $(3,088)        $(1,772)
                                                    ===========     ===========

Net income (loss) per share applicable
  to common shares:

       Basic net income (loss) per share .......         $(0.30)         $(0.17)
                                                    ===========     ===========
       Diluted net income (loss) per share .....         $(0.30)         $(0.17)
                                                    ===========     ===========
Weighted average shares and share
  equivalents outstanding ......................     10,406,738      10,419,705
                                                    ===========     ===========


                   The accompanying notes are an integral part
                   of these consolidated financial statements.
<PAGE>


                            FINLAY ENTERPRISES, INC.
                           CONSOLIDATED BALANCE SHEETS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                                                     (UNAUDITED)
                                                          JANUARY 29,  APRIL 29,
                                                             2000        2000
                                                           --------    --------
                           ASSETS

Current assets
  Cash and cash equivalents ............................    $ 35,107    $  7,961
  Accounts receivable - department stores ..............      22,574      36,412
  Other receivables ....................................      31,075      37,024
  Merchandise inventories ..............................     279,336     320,198
  Prepaid expenses and other ...........................       2,083       4,224
                                                            --------    --------
     Total current assets ..............................     370,175     405,819
                                                            --------    --------
Fixed assets

  Equipment, fixtures and leasehold improvements .......     110,017     116,055
  Less - accumulated depreciation and amortization .....      40,439      41,722
                                                            --------    --------
     Fixed assets, net .................................      69,578      74,333
                                                            --------    --------
Deferred charges and other assets ......................      20,484      20,462
Goodwill ...............................................      96,805      97,614
                                                            --------    --------
     Total assets ......................................    $557,042    $598,228
                                                            ========    ========

            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

  Notes payable ........................................    $     --    $ 86,609
  Accounts payable - trade .............................     149,799     105,299
  Accrued liabilities:
     Accrued salaries and benefits .....................      23,094      19,007
     Accrued miscellaneous taxes .......................       6,296       5,568
     Accrued interest ..................................       5,321      10,685
     Other .............................................      19,729      22,215
  Income taxes payable .................................       6,668       4,173
  Deferred income taxes ................................       1,681       1,552
                                                            --------    --------
     Total current liabilities .........................     212,588     255,108
Long-term debt .........................................     225,000     225,000
Other non-current liabilities ..........................      10,654      11,047
                                                            --------    --------
     Total liabilities .................................     448,242     491,155
                                                            --------    --------
Stockholders' equity

  Common Stock, par value $.01 per share;
     authorized 25,000,000 shares;
     issued and outstanding 10,416,353
     and 10,421,353 shares, respectively ...............         104         104
  Additional paid-in capital ...........................      77,194      77,239
  Retained earnings (deficit) ..........................      31,502      29,730
                                                            --------    --------
     Total stockholders' equity ........................     108,800     107,073
                                                            --------    --------
     Total liabilities and stockholders' equity ........    $557,042    $598,228
                                                            ========    ========


                   The accompanying notes are an integral part
                   of these consolidated financial statements.

                                       2
<PAGE>


                            FINLAY ENTERPRISES, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                        COMMON STOCK                                    FOREIGN
                                                    ---------------------   ADDITIONAL     RETAINED     CURRENCY         TOTAL
                                                      NUMBER                  PAID-IN      EARNINGS    TRANSLATION    STOCKHOLDERS'
                                                    OF SHARES      AMOUNT     CAPITAL     (DEFICIT)     ADJUSTMENT       EQUITY
                                                    ----------     ------     -------      --------       -------       ---------
<S>                                                 <C>             <C>       <C>           <C>           <C>             <C>
Balance, January 30, 1999 ....................      10,403,353      $104      $77,057       $27,439       $(4,789)        $99,811
  Net income (loss) ..........................              --        --           --         4,063            --           4,063
  Foreign currency translation
     adjustment ..............................              --        --           --            --         4,789           4,789
  Exercise of stock options ..................          13,000        --          137            --            --             137
                                                    ----------      ----      -------      --------       -------       ---------
Balance, January 29, 2000 ....................      10,416,353       104       77,194        31,502            --         108,800
  Net income (loss) ..........................              --        --           --        (1,772)           --          (1,772)
  Exercise of stock options ..................           5,000        --           45            --            --              45
                                                    ----------      ----      -------      --------       -------       ---------
Balance, April 29, 2000
  (unaudited) ................................      10,421,353      $104      $77,239       $29,730       $    --        $107,073
                                                    ==========      ====      =======      ========       =======       =========
</TABLE>


                   The accompanying notes are an integral part
                   of these consolidated financial statements.

                                       3
<PAGE>


                            FINLAY ENTERPRISES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

                                                          THIRTEEN WEEKS ENDED
                                                         ----------------------
                                                           MAY 1,      APRIL 29,
                                                            1999         2000
                                                         ---------    ---------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss) ..................................   $  (3,088)   $  (1,772)
  Adjustments to reconcile net income (loss)
     to net cash used in operating activities:
  Depreciation and amortization ......................       4,505        4,510
  Other, net .........................................         556          827
  Changes in operating assets and liabilities,
     net of effect from purchase of
     J.B. Rudolph assets (Note 6):
     Increase in accounts and other receivables ......     (19,301)     (26,850)
     Increase in merchandise inventories .............      (9,962)     (24,579)
     Increase in prepaid expenses and other ..........      (1,110)      (2,154)
     Decrease in accounts payable and
        accrued liabilities ..........................     (58,124)     (45,007)
                                                         ---------    ---------
        NET CASH USED IN OPERATING ACTIVITIES ........     (86,524)     (95,025)
                                                         ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of equipment, fixtures and
     leasehold improvements ..........................      (3,877)      (3,833)
  Deferred charges and other, net ....................      (2,281)        (554)
  Proceeds from sale of Sonab assets .................          --        6,792
  Payment for purchase of J. B. Rudolph assets .......          --      (20,605)
                                                         ---------    ---------
        NET CASH USED IN INVESTING ACTIVITIES ........      (6,158)     (18,200)
                                                         ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from revolving credit facility ............     185,976      202,919
  Principal payments on revolving credit facility ....    (106,691)    (116,310)
  Stock options exercised and other, net .............          57           45
                                                         ---------    ---------
        NET CASH PROVIDED FROM FINANCING ACTIVITIES ..      79,342       86,654
                                                         ---------    ---------
        EFFECT OF EXCHANGE RATE CHANGES ON CASH ......        (137)        (575)
                                                         ---------    ---------
        DECREASE IN CASH AND CASH EQUIVALENTS ........     (13,477)     (27,146)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .......      17,328       35,107
                                                         ---------    ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD .............   $   3,851    $   7,961
                                                         =========    =========

Supplemental disclosure of cash flow information:

  Interest paid ......................................   $   1,674    $   1,227
  Income taxes paid (received) .......................      (3,269)       2,663



                   The accompanying notes are an integral part
                   of these consolidated financial statements.

                                       4
<PAGE>


                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

     The  accompanying  unaudited  consolidated  financial  statements of Finlay
Enterprises,  Inc.  (the  "Company" or the  "Registrant"),  and its wholly owned
subsidiary,  Finlay Fine Jewelry  Corporation and its wholly owned  subsidiaries
("Finlay  Jewelry"),  have been prepared in accordance  with generally  accepted
accounting principles for interim financial information.  References to "Finlay"
mean collectively, the Company and Finlay Jewelry. In the opinion of management,
the  accompanying   unaudited  consolidated  financial  statements  contain  all
adjustments necessary to present fairly the financial position of the Company as
of April 29, 2000, and the results of operations and cash flows for the thirteen
weeks ended May 1, 1999 and April 29, 2000.  Due to the  seasonal  nature of the
business,  results for interim periods are not indicative of annual results. The
unaudited  consolidated  financial  statements  have  been  prepared  on a basis
consistent  with that of the audited  consolidated  financial  statements  as of
January 29, 2000 referred to below. Certain information and footnote disclosures
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principles have been condensed or omitted  pursuant to the
rules  and   regulations  of  the  Securities  and  Exchange   Commission   (the
"Commission").

     These consolidated  financial statements should be read in conjunction with
the audited consolidated  financial statements and notes thereto included in the
Company's  annual report on Form 10-K for the fiscal year ended January 29, 2000
("Form 10-K") previously filed with the Commission.

     Finlay's fiscal year ends on the Saturday closest to January 31. References
to 1997, 1998, 1999 and 2000 relate to the fiscal years ending January 31, 1998,
January 30, 1999, January 29, 2000 and February 3, 2001,  respectively.  Each of
the fiscal years includes 52 weeks, except 2000 includes 53 weeks.

     Net income (loss) per share has been computed in accordance  with Statement
of Financial  Accounting Standards ("SFAS") No. 128, "Earnings per Share". Basic
and  diluted  net income  (loss) per share were  calculated  using the  weighted
average  number of shares  outstanding  during  each  period,  with  options  to
purchase Common Stock included in diluted net income (loss) per share, using the
treasury  stock method,  to the extent that such options were  dilutive.  As the
Company  had a net loss for the  thirteen  weeks ended May 1, 1999 and April 29,
2000,  the  dilutive  stock  options  outstanding  are  not  considered  in  the
calculation  of dilutive net income (loss) per share due to their  anti-dilutive
effect. As a result,  the weighted average number of shares outstanding used for
both the basic and dilutive  net income  (loss) per share  calculations  was the
same.

     In 1998,  the  Company  adopted  SFAS  No.  130,  "Reporting  Comprehensive
Income". This Statement requires disclosure of comprehensive income,  defined as
the total of net income and all other  nonowner  changes in equity,  which under
generally  accepted  accounting   principles,   are  recorded  directly  to  the
stockholders'  equity section of the consolidated  balance sheet and, therefore,
bypass net income.  In 1999,  the only nonowner  change in equity related to the
foreign  currency  translation  adjustment.  For the thirteen weeks ended May 1,
1999,  the  comprehensive  loss was $6.0  million.  In 2000,  there were no such
adjustments  and,  therefore,  comprehensive  income  (loss) was the same as the
Company's net income (loss).

                                       5
<PAGE>


                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - DESCRIPTION OF BUSINESS

     The Company conducts business through its wholly owned  subsidiary,  Finlay
Jewelry.  Finlay is a retailer of fine jewelry  products and primarily  operates
leased fine jewelry  departments  in  department  stores  throughout  the United
States.  Over the past three fiscal years,  the fourth quarter  accounted for an
average of 43% of Finlay's  domestic sales due to the  seasonality of the retail
jewelry industry. Approximately 46% of Finlay's domestic sales in 1999 were from
operations in The May Department  Stores Company  ("May") and 22% in departments
operated in store groups owned by Federated Department Stores.

NOTE 3 - MERCHANDISE INVENTORIES

     Merchandise inventories consisted of the following:

                                                                     (UNAUDITED)
                                                      JANUARY 29,     APRIL 29,
                                                          2000          2000
                                                       ---------      ---------
                                                            (IN THOUSANDS)
Jewelry goods - rings, watches and
    other fine jewelry (specific
    identification basis) ......................       $ 283,717      $ 324,666
Less:  Excess of specific identification
    cost over LIFO inventory value .............           4,381          4,468
                                                       ---------      ---------
                                                       $ 279,336      $ 320,198
                                                       =========      =========

     The LIFO method had the effect of  increasing  the loss before income taxes
for the  thirteen  weeks  ended May 1, 1999 and April 29,  2000 by  $92,000  and
$88,000,  respectively.  Finlay determines its LIFO inventory value by utilizing
selected  producer price indices published for jewelry and watches by the Bureau
of Labor Statistics.

     Approximately  $329,850,000  and $359,593,000 at January 29, 2000 and April
29, 2000, respectively, of merchandise received on consignment has been excluded
from  Merchandise  inventories and Accounts  payable-trade  in the  accompanying
Consolidated Balance Sheets.

     Finlay  Jewelry  is  party  to a  gold  consignment  agreement  (the  "Gold
Consignment   Agreement"),   which  expires  on  December  31,  2001.  The  Gold
Consignment Agreement enables Finlay Jewelry to receive merchandise by providing
gold, or otherwise  making  payment,  to certain  vendors who supply Finlay with
merchandise on consignment.  While the merchandise  involved remains  consigned,
title to the gold content of the  merchandise  transfers from the vendors to the
gold  consignor.  Finlay  Jewelry can obtain,  pursuant to the Gold  Consignment
Agreement,  up to the lesser of (i) 100,000 fine troy ounces or (ii) $32,000,000
worth of gold,  subject  to a  formula  as  prescribed  by the Gold  Consignment
Agreement.  At April 29, 2000,  amounts  outstanding  under the Gold Consignment
Agreement  totaled  91,426  fine  troy  ounces,  valued at  approximately  $25.2
million. For financial statement purposes, the consigned gold is not included in
Merchandise  inventories  on the  Company's  Consolidated  Balance  Sheets  and,
therefore, no related liability has been recorded.

                                       6
<PAGE>


                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - MERCHANDISE INVENTORIES (continued)

     The cost to Finlay of gold merchandise sold on consignment in some cases is
not fixed until the sale is reported to the vendor or to the gold  consignor  in
the case of merchandise sold pursuant to the Gold Consignment Agreement.  Finlay
at times enters into futures contracts,  such as options or forwards, based upon
the  anticipated  sales of gold product,  to hedge against the risk arising from
those payment arrangements. Changes in the market value of futures contracts are
accounted for as an addition to or reduction from the inventory cost. At January
29,  2000,  the Company had two open  positions  in futures  contracts  for gold
totaling 25,000 fine troy ounces,  valued at $7.3 million,  which expired during
the first quarter of 2000. At April 29, 2000, the Company had two open positions
in futures contracts for gold totaling 38,000 fine troy ounces,  valued at $10.8
million, which expire during the fall of 2000.

     In June 1998,  SFAS No. 133,  "Accounting  for Derivative  Instruments  and
Hedging  Activities"  was issued.  This  Statement  requires that all derivative
instruments  be recorded in the  balance  sheet as either an asset or  liability
measured at its fair value and that changes in the derivative  instrument's fair
value be recognized  currently in earnings or in comprehensive  income. SFAS No.
133 is effective for fiscal years  beginning after June 15, 2000. The Company is
currently evaluating the impact of adopting SFAS No. 133.

NOTE 4 - LEASE AGREEMENTS

     Finlay conducts  substantially all of its operations as leased  departments
in department  stores.  All of these leases, as well as rentals for office space
and equipment,  are accounted for as operating  leases. A substantial  number of
such  operating  leases expire on various dates  through  2008.  All  references
herein to leased  departments refer to departments  operated pursuant to license
agreements or other arrangements with host department stores.

     Substantially  all of the department store leases provide that the title to
certain fixed assets of Finlay  transfers upon  termination  of the leases,  and
that Finlay will receive the  undepreciated  value of such fixed assets from the
host store in the event such transfers occur, although the depreciation schedule
provided  for in the lease may  differ  from that used for  financial  reporting
purposes.  The values of such fixed assets are recorded at the  inception of the
lease  arrangement and are reflected in the  accompanying  Consolidated  Balance
Sheets.

     In many cases,  Finlay is subject to limitations under its lease agreements
with host department stores which prohibit Finlay from operating departments for
other store groups within a certain geographical radius of the host store.

                                       7
<PAGE>


                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - LEASE AGREEMENTS (continued)

     The store leases  provide for the payment of fees based on sales,  plus, in
some instances,  installment payments for fixed assets. Lease expense,  included
in Selling, general and administrative expenses, is as follows:

                                                       THIRTEEN WEEKS ENDED
                                                  -----------------------------
                                                    MAY 1,             APRIL 29,
                                                     1999                2000
                                                  ---------           ---------
                                                          (IN THOUSANDS)

Minimum fees ..............................       $   4,163           $   2,764
Contingent fees ...........................          23,433              26,463
                                                  ---------           ---------
  Total ...................................       $  27,596           $  29,227
                                                  =========           =========

NOTE 5 - SALE AND CLOSURE OF SONAB

     On January 3, 2000,  Societe  Nouvelle  d'Achat de  Bijouterie - S.O.N.A.B.
("Sonab"), the Company's European leased jewelry department subsidiary, sold the
majority of its assets for approximately  $9.9 million.  As of January 29, 2000,
Sonab  had  received  $1.2  million  of the sale  proceeds.  Sonab  received  an
additional $6.8 million in February 2000 upon the completion of the post-closing
audit,  and the  balance of $1.9  million  remains  subject  to  certain  escrow
arrangements among the parties.  After the sale, the buyer operated more than 80
locations  previously  included  in Sonab's  130-location  base in  France.  The
remaining  departments were closed. The Company recorded a pre-tax charge in the
fourth quarter of 1999 of $28.6  million,  or $1.62 per share on a diluted basis
after-tax,  for the  write-down of assets for  disposition  and related  closure
expenses.

NOTE 6 - JAY B. RUDOLPH, INC. ACQUISITION

     On April 3, 2000, Finlay completed the acquisition of certain assets of Jay
B. Rudolph,  Inc. ("J.B.  Rudolph") for $20.6 million,  consisting  primarily of
inventory  and fixed  assets.  By  acquiring  J.B.  Rudolph  (the "J.B.  Rudolph
Acquisition"),  Finlay  added 57  departments  and  also  added  new host  store
relationships with Bloomingdale's,  Dayton's, and Hudson's.  Finlay financed the
J.B.  Rudolph  Acquisition  with  borrowings  under  Finlay's  revolving  credit
agreement  with  General  Electric  Capital  Corporation  and the other  lenders
thereto (the "Revolving Credit Agreement").

     The  J.B.  Rudolph  Acquisition  was  accounted  for  as a  purchase,  and,
accordingly,  the operating results of the former J.B. Rudolph  departments have
been included in the Company's  consolidated financial statements since the date
of  acquisition.  The Company has recorded  goodwill of $1.7 million  based on a
preliminary purchase price allocation. Goodwill is being amortized over a period
of ten years.

                                       8
<PAGE>


                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - DOMESTIC OPERATIONS UNAUDITED PROFORMA FINANCIAL INFORMATION

     The following table presents proforma domestic  statement of operations for
the thirteen  weeks ended May 1, 1999,  which  reflects the  Company's  domestic
operations only and excludes the operating results of Sonab. Refer to Note 5 for
additional  information  regarding the  disposition  and close-down of Sonab. In
addition,  the Company's  actual  results of operations  for the thirteen  weeks
ended April 29, 2000 are shown for comparative purposes.

IN THOUSANDS, EXCEPT SHARE
AND PER SHARE AMOUNTS
(UNAUDITED)
                                                 THIRTEEN WEEKS ENDED
                                    ------------------------------------------
                                        MAY 1, 1999           APRIL 29, 2000
                                          PROFORMA                ACTUAL
                                    -------------------    -------------------
Sales ............................  $   162,651   100.0%   $   178,614   100.0%
Cost of sales ....................       78,897    48.5         87,336    48.9
                                    -----------   -----    -----------   -----
Gross margin .....................       83,754    51.5         91,278    51.1
Selling, general and
  administrative expenses ........       76,144    46.8         82,736    46.3
Depreciation and amortization ....        4,024     2.5          4,204     2.4
                                    -----------   -----    -----------   -----
  Income (loss) from operations ..        3,586     2.2          4,338     2.4
Interest expense, net ............        6,368     3.9          6,897     3.8
                                    -----------   -----    -----------   -----
  Income (loss) before
    income taxes .................       (2,782)   (1.7)        (2,559)   (1.4)
Provision (benefit) for
    income taxes .................         (827)   (0.5)          (787)   (0.4)
                                    -----------   -----    -----------   -----
  Net income (loss) ..............  $    (1,955)   (1.2)%  $    (1,772)   (1.0)%
                                    ===========   =====    ===========   =====

Net income (loss) per share
  applicable to common shares:
Basic net income (loss)
  per share ......................  $     (0.19)           $     (0.17)
                                    ===========            ===========
Diluted net income (loss)
  per share ......................  $     (0.19)           $     (0.17)
                                    ===========            ===========
Weighted average shares and
  share equivalents outstanding ..   10,406,738             10,419,705
                                    ===========            ===========

                                       9
<PAGE>


PART I - FINANCIAL INFORMATION
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

     The following table sets forth  operating  results as a percentage of sales
for the periods indicated:

STATEMENTS OF OPERATIONS DATA
(UNAUDITED)

                                                           THIRTEEN WEEKS ENDED
                                                          ----------------------
                                                           MAY 1,      APRIL 29,
                                                            1999         2000
                                                           ------       ------
Sales ................................................      100.0%       100.0%
Cost of sales ........................................       48.7         48.9
                                                           ------       ------
    Gross margin .....................................       51.3         51.1
Selling, general and administrative expenses .........       47.4         46.3
Depreciation and amortization ........................        2.5          2.4
                                                           ------       ------
    Income (loss) from operations ....................        1.4          2.4
Interest expense, net ................................        4.2          3.8
                                                           ------       ------
    Income (loss) before income taxes ................       (2.8)        (1.4)
Provision (benefit) for income taxes .................       (1.0)        (0.4)
                                                           ------       ------
    Net income (loss) ................................       (1.8)%       (1.0)%
                                                           ======       ======

THIRTEEN WEEKS ENDED APRIL 29, 2000 COMPARED WITH THIRTEEN WEEKS ENDED
MAY 1, 1999

     SALES.  Sales for the thirteen weeks ended April 29, 2000  increased  $10.2
million, or 6.1%, over the comparable period in 1999. On a domestic basis, sales
increased $16.0 million,  or 9.8%, over the 1999 period.  Comparable  department
sales (departments open for the same months during comparable periods) increased
4.7%.  Management attributes this increase in the comparable department sales to
the  following  initiatives:  (i)  emphasizing  its "Key Item" and "Best  Value"
merchandising  programs,  which  provide  a  targeted  assortment  of  items  at
competitive prices; (ii) increasing focus on holiday and event-driven promotions
as well as host store marketing  programs;  and (iii)  positioning the Company's
departments  as a  "destination  location"  for  fine  jewelry.  Sales  from the
operation of net new departments contributed $2.3 million, primarily relating to
the J.B.  Rudolph  Acquisition  and the net  effect  of new store  openings  and
closings offset by the sale and closure of Sonab at the end of 1999.

     During  the  thirteen  weeks  ended  April  29,  2000,   Finlay  opened  66
departments and closed seven  departments.  The openings included 57 departments
as a  result  of the J.B.  Rudolph  Acquisition,  including  23  departments  in
Bloomingdale's, 13 departments in Dayton's and 21 departments in Hudson's, seven
departments as a result of May's acquisition of ZCMI and two departments  within
existing store groups. The closings were all within existing store groups.

     GROSS  MARGIN.  Gross  margin for the  period  increased  by $4.8  million,
primarily as a result of the sales  increase.  As a percentage  of sales,  gross
margin  decreased by 0.2%. On a domestic basis,  gross margin as a percentage of
sales decreased by 0.4% primarily attributable to management's efforts to

                                       10
<PAGE>


increase  market  penetration  and market share through its pricing  strategy as
well as  intensified  promotional  activity  by the host  stores,  including  an
increased usage of in-store  coupons.  There was a LIFO charge of  approximately
$0.1  million in each of the thirteen  week periods  ended May 1, 1999 and April
29, 2000.

     SELLING,  GENERAL  AND  ADMINISTRATIVE   EXPENSES.   Selling,  general  and
administrative  expenses ("SG&A") increased $2.8 million, or 3.5%, due primarily
to payroll  expense and lease fees associated with the increase in the Company's
sales.  SG&A as a percentage of sales decreased by 1.1%, and on a domestic basis
by 0.5%, as a result of the leveraging of these expenses. In addition,  expenses
related to the Company's year 2000  remediation  project  totaled  approximately
$0.5  million  for the  thirteen  weeks  ended May 1,  1999.  There were no such
expenses recorded in the current year's quarter.

     DEPRECIATION  AND  AMORTIZATION.  Depreciation  and  amortization  was $4.2
million in both  periods,  reflecting  an increase in capital  expenditures  and
capitalized  software  costs for the most recent  twelve  months,  offset by the
effect of certain assets  becoming fully  depreciated as well as the disposition
and write-off of Sonab's fixed assets.  On a domestic  basis,  depreciation  and
amortization  increased by $0.2 million. The increase in fixed assets was due to
the addition of new departments,  the renovation of existing departments and the
inclusion  of the cost of fixed  assets  acquired  in  connection  with the J.B.
Rudolph Acquisition.

     INTEREST EXPENSE, NET. Interest expense decreased by $0.1 million primarily
due to a decrease in average  borrowings  ($287.3 million for the period in 2000
compared to $305.0 million for the comparable period in 1999) offset by a higher
weighted  average  interest rate (8.6% for the 2000 period  compared to 8.3% for
the comparable period in 1999).

     PROVISION (BENEFIT) FOR INCOME TAXES. The income tax provision for the 2000
and 1999 periods reflects an effective tax rate of 40.5%.

     NET INCOME  (LOSS).  The net loss of $1.8  million  for the 2000 period was
$1.3  million  lower  than the net loss in the  prior  period as a result of the
factors  discussed  above. On a domestic basis, the net loss for the 2000 period
was $0.2 million lower than the net loss in the prior period, which totaled $2.0
million.

LIQUIDITY AND CAPITAL RESOURCES

     Finlay's  primary capital  requirements are for funding working capital for
new departments and for working capital growth of existing departments and, to a
lesser extent,  capital  expenditures  for opening new  departments,  renovating
existing departments and information  technology  investments.  For the thirteen
weeks ended May 1, 1999 and April 29, 2000,  capital  expenditures  totaled $3.9
million and $3.8 million  (exclusive  of the fixed  assets  acquired in the J.B.
Rudolph Acquisition), respectively. For 1999, capital expenditures totaled $15.0
million and for 2000 are estimated to be approximately $15.0 million,  exclusive
of the fixed assets acquired in the J.B. Rudolph  Acquisition.  Although capital
expenditures are limited by the terms of the Revolving Credit Agreement, to date
this  limitation  has not  precluded  the Company  from  satisfying  its capital
expenditure requirements.

     Finlay's  operations  substantially  preclude  customer  receivables and in
recent years, on average, approximately 50% of Finlay's domestic merchandise has
been carried on consignment.  Accordingly,  management  believes that relatively
modest  levels of working  capital  are  required  in  comparison  to many other
retailers. The Company's working capital balance was $150.7 million at April 29,
2000, a decrease of $6.9 million  from January 29, 2000.  The decrease  resulted
primarily from the impact of the

                                       11
<PAGE>


interim  net loss,  exclusive  of  depreciation  and  amortization,  and capital
expenditures. Based on the seasonal nature of Finlay's business, working capital
requirements  and therefore  borrowings under the Revolving Credit Agreement can
be expected to increase on an interim  basis during the first three  quarters of
any given fiscal year. See "--Seasonality".

     The seasonality of Finlay's business causes working capital requirements to
reach their  highest  level in the months of October,  November  and December in
anticipation of the year-end  holiday season.  Accordingly,  Finlay  experiences
seasonal cash needs as inventory  levels peak.  The Revolving  Credit  Agreement
provides Finlay with a line of credit of up to $275.0 million to finance working
capital needs.  Amounts  outstanding  under the Revolving  Credit Agreement bear
interest at a rate equal to, at Finlay's option,  (i) the Index Rate (as defined
in the Revolving  Credit  Agreement)  plus a margin ranging from zero to 1.0% or
(ii)  adjusted  LIBOR  plus a margin  ranging  from  1.0% to 2.0%,  in each case
depending on the financial performance of the Company.

     In each year, Finlay is required to reduce the outstanding revolving credit
balance and letter of credit  balance  under the Revolving  Credit  Agreement to
$50.0  million  or less  and  $20.0  million  or  less,  respectively,  for a 30
consecutive day period (the "Balance Reduction  Requirement").  Borrowings under
the Revolving Credit Agreement at April 29, 2000 were $86.6 million, compared to
a zero balance at January 29, 2000 and $79.3 million at May 1, 1999. The average
amounts  outstanding under the Revolving Credit Agreement were $80.0 million and
$62.3  million  for the  thirteen  weeks  ended May 1, 1999 and April 29,  2000,
respectively.  The maximum amount outstanding for the thirteen weeks ended April
29, 2000 was $102.7 million.

     Finlay does not expect that significant  additional working capital will be
required  with respect to the operation of the former J.B.  Rudolph  departments
because Finlay purchased the inventory of those J.B. Rudolph  departments  which
it acquired.  On a going-forward  basis, Finlay expects that inventory purchases
for the  former  J.B.  Rudolph  departments  will be  financed  in part by trade
payables combined with the utilization of consignment inventory. Finlay financed
the  J.B.  Rudolph  Acquisition  with  borrowings  under  its  Revolving  Credit
Agreement.

     On January 3, 2000, Sonab sold the majority of its assets for approximately
$9.9  million.  As of January 29, 2000,  Sonab had received  $1.2 million of the
sale proceeds.  Sonab received an additional  $6.8 million in February 2000 upon
the  completion  of the  post-closing  audit,  and the  balance of $1.9  million
remains  subject to certain  escrow  arrangements  among the parties.  After the
sale, the buyer operated more than 80 locations  previously  included in Sonab's
130-location base in France. The remaining  departments were closed. The Company
recorded a pre-tax  charge in the fourth  quarter of 1999 of $28.6  million,  or
$1.62 per share on a diluted basis  after-tax,  for the write-down of assets for
disposition  and related closure  expenses.  The cash portion of this charge was
approximately $7.8 million.

     Finlay's  long-term needs for external financing will depend on its rate of
growth,  the level of  internally  generated  funds and the  ability to continue
obtaining  substantial amounts of merchandise on advantageous  terms,  including
consignment  arrangements  with its  vendors.  For 1999,  Finlay  had an average
balance of  consignment  merchandise of $329.9  million from  approximately  300
vendors as compared to an average balance of $283.8 million in 1998. As of April
29, 2000,  $359.6 million of consignment  merchandise was on hand as compared to
$305.0 million at May 1, 1999.

     A substantial  amount of Finlay's operating cash flow has been used or will
be  required  to pay  interest,  directly  or  indirectly,  with  respect to the
Company's 9% Senior Debentures due May 1, 2008

                                       12
<PAGE>


(the "Senior  Debentures"),  Finlay Jewelry's 8 3/8 Senior Notes due May 1, 2008
(the  "Senior  Notes")  and amounts due under the  Revolving  Credit  Agreement,
including the payments required  pursuant to the Balance Reduction  Requirement.
As of April 29, 2000, Finlay's outstanding borrowings were $311.6 million, which
included a $75.0 million balance under the Senior  Debentures,  a $150.0 million
balance under the Senior Notes and an $86.6 million  balance under the Revolving
Credit Agreement.

     Finlay Jewelry is party to the Gold Consignment Agreement, which expires on
December 31, 2001.  The Gold  Consignment  Agreement  enables  Finlay Jewelry to
receive  merchandise by providing gold, or otherwise making payment,  to certain
vendors.  Finlay Jewelry can obtain, pursuant to the Gold Consignment Agreement,
up to the lesser of (i) 100,000 fine troy ounces or (ii) $32.0  million worth of
gold, subject to a formula as prescribed by the Gold Consignment  Agreement.  At
April 29, 2000, amounts outstanding under the Gold Consignment Agreement totaled
91,426 fine troy ounces,  valued at  approximately  $25.2  million.  The average
amount  outstanding  under the Gold  Consignment  Agreement was $23.5 million in
1999.

     The year 2000  issue  has not posed  significant  operational  problems  to
Finlay.  Finlay used a combination of internal and external resources to execute
its year 2000  project  plan.  The costs  related to Finlay's  year 2000 efforts
totaled approximately $4.0 million, of which approximately $1.9 million and $2.1
million was spent in 1998 and 1999,  respectively.  Finlay  funded the year 2000
costs through operating cash flows.

     The  Company  is  in  the  process  of  implementing   several  information
technology   initiatives,   including  the  design  and  development  of  a  new
merchandising system and a point-of-sale system in Finlay's  departments.  These
projects  will serve to support  future growth of the Company as well as provide
improved analysis and reporting capabilities and are expected to be completed by
mid-2001.  The cost  associated  with these  projects is  estimated  to be $14.0
million  for  software  and  implementation  costs,  to be  included in Deferred
charges and other  assets.  At April 29,  2000, a total of  approximately  $10.2
million has been  expended  and included in Deferred  charges and other  assets.
Approximately  $4.0 million for hardware and related  equipment  was expended in
1999 to upgrade Finlay's departments and is reflected in Fixed assets.

     Section 382 of the Internal  Revenue Code of 1986,  as amended (the "Code")
restricts  utilization  of net operating  loss  carryforwards  ("NOLs") after an
ownership   change   exceeding  50%.  As  a  result   certain   recapitalization
transactions  in 1993,  a change  in  ownership  of the  Company  exceeding  50%
occurred  within the  meaning of Section 382 of the Code.  Similar  restrictions
apply to other  carryforwards.  Consequently,  there is a material limitation on
the  Company's  annual  utilization  of its NOLs and other  carryforwards  which
requires  a  deferral  or  loss  of  the  utilization  of  such  NOLs  or  other
carryforwards.  The Company  had, at October  31, 1999 (the  Company's  tax year
end), a NOL for tax purposes of  approximately  $7.5 million which is subject to
an annual limit of approximately $2.0 million per year.  However,  for financial
reporting purposes, no NOL exists as of January 29, 2000.

     From time to time, Finlay enters into futures contracts, such as options or
forwards,  based upon the  anticipated  sales of gold  product in order to hedge
against the risk  arising from its payment  arrangements.  Changes in the market
value of futures contracts are accounted for as an addition to or reduction from
the inventory  cost.  For the year ended  January 29, 2000,  the gain or loss on
open futures contracts was not material.  At April 29, 2000, the Company had two
open positions in futures  contracts for gold totaling  38,000 fine troy ounces,
valued at $10.8 million,  which expire during the fall of 2000.  There can be no
assurance  that these  hedging  techniques  will be  successful  or that hedging
transactions  will not adversely  affect the Company's  results of operations or
financial position.

                                       13
<PAGE>


         Finlay  believes  that,  based  upon  current  operations,  anticipated
growth,  and availability  under the Revolving Credit Agreement,  Finlay Jewelry
will,  for  the  foreseeable  future,  be  able to meet  its  debt  service  and
anticipated  working  capital  obligations,  and to  make  distributions  to the
Company  sufficient  to permit the Company to meet its debt service  obligations
and to pay certain other expenses as they come due. No assurances,  however, can
be given that Finlay Jewelry's  current level of operating results will continue
or improve or that Finlay  Jewelry's  income from operations will continue to be
sufficient to permit  Finlay  Jewelry and the Company to meet their debt service
and  other  obligations.   Currently,   Finlay  Jewelry's   principal  financing
arrangements restrict annual distributions from Finlay Jewelry to the Company to
0.25% of Finlay Jewelry's net sales for the preceding fiscal year and also allow
distributions  to the  Company  to enable it to make  interest  payments  on the
Senior  Debentures.  The amounts  required to satisfy  the  aggregate  of Finlay
Jewelry's  interest  expense and  required  amortization  payments  totaled $1.7
million and $1.2 million for the thirteen  weeks ended May 1, 1999 and April 29,
2000, respectively.

SEASONALITY

     Finlay's  business is highly  seasonal,  with a significant  portion of its
sales and income from  operations  generated  during the fourth  quarter of each
year, which includes the year-end holiday season.  The fourth quarter  accounted
for an average of 43% of Finlay's  sales and 81% of its income  from  operations
for 1997,  1998 and 1999.  Finlay has  typically  experienced  net losses in the
first three quarters of its fiscal year.  During these periods,  working capital
requirements   have  been  funded  by  borrowings  under  the  Revolving  Credit
Agreement.  Accordingly,  the results for any of the first three quarters of any
given fiscal year, taken individually or in the aggregate, are not indicative of
annual results.

INFLATION

     The effect of  inflation  on Finlay's  results of  operations  has not been
material in the periods discussed.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Quarterly  Report on Form 10-Q includes  "forward-looking  statements"
within the meaning of Section 27A of the  Securities Act of 1993 and Section 21E
of the  Securities  Exchange Act of 1934 (the  "Exchange  Act").  All statements
other  than   statements  of   historical   information   provided   herein  are
forward-looking  statements and may contain information about financial results,
economic  conditions,  trends  and  known  uncertainties.   The  forward-looking
statements  contained herein are subject to certain risks and uncertainties that
could cause  actual  results to differ  materially  from those  reflected in the
forward-looking statements.  Factors that might cause such a difference include,
but are not limited to,  those  discussed  under  "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations", as well as trends in
the general  economy in the United  States,  competition  in the retail  jewelry
business,  the seasonality of the retail jewelry business, the Company's ability
to  increase  comparable  department  sales  and to open  new  departments,  the
Company's   dependence   on  certain  host  store   relationships   due  to  the
concentration  of sales generated by such host stores,  the  availability to the
Company of alternate sources of merchandise supply in the case of an abrupt loss
of any  significant  supplier,  the  Company's  ability  to  continue  to obtain
substantial  amounts of merchandise  on  consignment,  the Company's  ability to
estimate the costs relating to the closure of Sonab, the Company's dependence on
key officers,  the Company's  ability to integrate future  acquisitions into its
existing business, the Company's high degree of leverage and the availability to
the Company of financing and

                                       14
<PAGE>


credit on  favorable  terms and  changes in  regulatory  requirements  which are
applicable to the Company's business.

     Readers  are  cautioned  not to rely on these  forward-looking  statements,
which reflect management's analysis,  judgment, belief or expectation only as of
the date hereof.  The Company  undertakes no obligation to publicly revise these
forward-looking  statements to reflect events or circumstances  that arise after
the date hereof. In addition to the disclosure contained herein,  readers should
carefully  review any disclosure of risks and  uncertainties  contained in other
documents the Company  files or has filed from time to time with the  Commission
pursuant to the Exchange Act.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market  risk  through  the  interest  rate on its
borrowings under the Revolving Credit  Agreement,  which has a variable interest
rate.  In seeking to minimize the risks from  interest  rate  fluctuations,  the
Company  manages   exposures   through  its  regular   operating  and  financing
activities.  In addition,  the majority of the  Company's  borrowings  are under
fixed rate  arrangements.  In  addition,  the  Company is exposed to market risk
related to changes in the price of gold, and selectively uses forward  contracts
to manage this risk. The Company enters into forward  contracts for the purchase
of gold to hedge the risk of gold price  fluctuations  for future  sales of gold
consignment  merchandise.  The Company does not enter into forward  contracts or
other financial  instruments for speculation or trading purposes.  The aggregate
amount of forward  contracts was $10.8  million at April 29, 2000,  which expire
during the fall of 2000.

                                       15
<PAGE>


PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       A.    EXHIBITS

          2      Not applicable.

          3      Not applicable.

          4      Not applicable.

       10.1      Amendment No. 10 and Limited Consent, dated as of April 21,
                 2000, to the Gold Consignment Agreement dated as of June 15,
                 1995, as amended, between Finlay Jewelry and Sovereign Bank, as
                 successor to Fleet National Bank, formerly known as BankBoston,
                 N.A., as successor to Rhode Island Hospital Trust National
                 Bank.

         11      Statement re: computation of earnings per share (not required
                 because the relevant computation can be clearly determined from
                 material contained in the financial statements).

         15      Not applicable.

         18      Not applicable.

         19      Not applicable.

         22      Not applicable.

         23      Not applicable.

         24      Not applicable.

         27      Financial Data Schedule.

         99      Not applicable.

       B.    REPORTS ON FORM 8-K

                 On April 17, 2000, the Company filed with the Commission a
                 Current Report on Form 8-K reporting the purchase by Finlay
                 Jewelry of certain assets of Jay B. Rudolph, Inc. relating to
                 the operation of leased fine jewelry departments in Dayton's
                 and Hudson's department stores owned by Target Corporation and
                 in department stores owned by Bloomingdale's, Inc.

                                       16
<PAGE>


                                   SIGNATURES

     Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: June 9, 2000                    FINLAY ENTERPRISES, INC.

                                      By: /s/ Bruce E. Zurlnick
                                          -------------------------------------
                                          Bruce E. Zurlnick
                                           Senior Vice President, Treasurer and
                                           Chief Financial Officer

                                          (As both a duly authorized officer of
                                          Registrant and as principal financial
                                          officer of Registrant)


                                       17