--------------------------------------------------------------------------------




                       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    November 2, 1996    

                                       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.)


               521 Fifth Avenue, New York, NY                 10175 
            --------------------------------------          ---------- 
           (Address of principal executive offices)         (zip code)

                                 (212) 808-2060 
                 ---------------------------------------------- 
              (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 December 13, 1996,  there were 7,558,838  shares of common stock, par
value $.01 per share, of the Registrant outstanding.


<PAGE>

                            FINLAY ENTERPRISES, INC.

                                    FORM 10-Q

                     QUARTERLY PERIOD ENDED NOVEMBER 2, 1996

                                      INDEX


                                                                        PAGE(S)

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited)

        Consolidated Statements of Operations for the thirteen weeks and 
        thirty-nine weeks ended October 28, 1995 and November 2, 1996.........1

        Consolidated Balance Sheets as of February 3, 1996 and November 2, 
        1996..................................................................3

        Consolidated Statements of Changes in Stockholders' Equity 
        for the year ended February 3, 1996 and thirty-nine weeks
        ended November 2, 1996................................................4

        Consolidated Statements of Cash Flows for the thirteen weeks and 
        thirty-nine weeks ended October 28, 1995 and November 2, 1996.........5

        Notes to Consolidated Financial Statements............................7

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations........................11


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)

<TABLE>
<CAPTION>



                                                                     Thirteen Weeks Ended
                                                                     --------------------
                                                                                   
                                                                 October 28,       November 2,
                                                                     1995             1996
                                                                 ------------      -----------

<S>                                                              <C>               <C>        
Sales......................................................      $   132,058      $   136,140
Cost of sales..............................................           63,285           65,780
                                                                 ------------      -----------
   Gross margin............................................           68,773           70,360
Selling, general and administrative expenses...............           62,991           63,255
Depreciation and amortization..............................            2,339            2,739
                                                                 ------------      -----------
   Income (loss) from operations...........................            3,443            4,366
Interest expense, net......................................            7,636            8,177
                                                                 ------------      -----------
   Income (loss) before income taxes.......................           (4,193)          (3,811)
Provision (credit) for income taxes........................           (1,433)          (1,174)
                                                                 ------------      -----------
   Net income (loss).......................................      $    (2,760)      $   (2,637) 
                                                                 ============      ===========  
Net income (loss) per share applicable to common shares....      $     (0.37)      $    (0.35)
                                                                 ============      ===========
Weighted average shares outstanding .......................        7,456,885        7,481,375
                                                                 ============      ===========
</TABLE>

 










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

                                              1
<PAGE>


                            FINLAY ENTERPRISES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share and per share data)
                                   (unaudited)



<TABLE>
<CAPTION>


                                                                    Thirty-Nine Weeks Ended
                                                                    -----------------------
                                                                                  
                                                                 October 28,      November 2,
                                                                     1995             1996
                                                                 ------------     ------------

<S>                                                              <C>              <C>         
Sales......................................................      $   380,202     $    404,047
Cost of sales..............................................          182,227          195,663
                                                                 ------------     ------------
   Gross margin............................................          197,975          208,384
Selling, general and administrative expenses...............          183,495          189,424
Depreciation and amortization..............................            7,235            8,123
                                                                 ------------     ------------
   Income (loss) from operations...........................            7,245           10,837
Proceeds from life insurance ..............................           (5,000)          -
Interest expense, net......................................           22,321           23,422
                                                                 ------------     ------------
   Income (loss) before income taxes.......................          (10,076)         (12,585)
Provision (credit) for income taxes........................           (5,106)          (3,981)
                                                                 ------------     ------------
   Net income (loss).......................................           (4,970)          (8,604)
Dividends on Preferred Stock and accretion on conversion
   of Preferred Stock......................................           10,717          -
                                                                 ------------     ------------
   Net income (loss) applicable to common shares...........      $   (15,687)     $    (8,604)
                                                                 ============     ============
Net income (loss) per share applicable to common shares....      $     (2.53)     $     (1.15)
                                                                 ============     ============
Weighted average shares outstanding (A)....................        6,197,057        7,481,182
                                                                 ============     ============
</TABLE>

 



-----------------
(A)  The weighted average shares outstanding for 1995 are based on the number 
     of shares of Common Stock issued and outstanding after reflecting the 
     stock split discussed in Note 5 - Initial Public Offering and Related
     Transactions, as if such split occurred on January 29, 1995.






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

                                              2
<PAGE>


                            FINLAY ENTERPRISES, INC.
                           CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)

<TABLE>
<CAPTION>

                                                                                 (unaudited)
                                                                   February 3,   November 2,
                                                                      1996           1996
                                                                   -----------   -----------
                                                                      
                                     ASSETS
Current assets
<S>                                                               <C>             <C>      
  Cash and cash equivalents...................................... $    26,014     $   1,652
  Accounts receivable - department stores........................      18,889        26,298
  Other receivables..............................................       2,860        11,478
  Merchandise inventories........................................     195,926       249,467
  Prepaid expenses and other.....................................       1,526         1,878
                                                                   -----------   -----------
     Total current assets........................................     245,215       290,773
                                                                   -----------   -----------        
Fixed assets
  Equipment, fixtures and leasehold improvements.................      65,206        75,992
  Less - accumulated depreciation and amortization...............      22,735        27,085
                                                                   -----------   -----------      
     Fixed assets, net...........................................      42,471        48,907
                                                                   -----------   -----------        
Deferred charges and other assets................................       9,012         9,699
Goodwill.........................................................      98,447        96,089
                                                                   -----------   -----------        
      Total assets................................................ $  395,145    $  445,468
                                                                   ===========    ==========
 

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Notes payable..................................................  $    -        $  99,979
  Current portion of long-term debt..............................        206             7
  Accounts payable - trade.......................................    125,817        93,143
  Accrued liabilities:
      Accrued salaries and benefits..............................     14,100        13,059
      Accrued miscellaneous taxes................................      4,160         3,369
      Accrued insurance..........................................      1,115         1,201
      Accrued interest...........................................      3,703           581
      Accrued management transition and consulting...............      2,418         1,946
      Other......................................................     16,093        16,887
  Income taxes payable...........................................     10,372           294
  Deferred income taxes..........................................        836           950
                                                                   ----------    ----------       
      Total current liabilities..................................    178,820       231,416
Long-term debt...................................................    202,905       209,169
Other non-current liabilities....................................        636           486
                                                                   ----------    ----------      
      Total liabilities..........................................    382,361       441,071
                                                                   ----------    ----------       
Stockholders' equity
  Common Stock, par value $.01 per share; authorized 
   25,000,000 shares; issued and outstanding 7,524,356 
   and 7,558,838 shares, respectively............................         75           76
  Additional paid-in capital.....................................     47,459       47,694
  Distributions to investor group in excess of carryover basis...    (24,390)     (24,390)
  Note receivable from stock sale................................     (1,001)      (1,001)
  Retained earnings (deficit)....................................     (8,612)     (17,216)
  Foreign currency translation adjustment........................       (747)        (766)
                                                                   ----------    ---------      
                                                                      12,784        4,397
                                                                   ----------    ---------       
      Total liabilities and stockholders' equity.................  $ 395,145    $ 445,468
                                                                   ==========    =========
</TABLE>
                                                                              


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


                                              3
<PAGE>



                            FINLAY ENTERPRISES, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        (in thousands, except share data)



<TABLE>
<CAPTION>

                                                                                    
                                      Common Stock              Distributions to    Notes                  Foreign       
                                      ------------   Additional  investor group   Receivable   Retained    Currency       Total    
                                   Number of          Paid-in    in excess of       from       Earnings   Translation  Stockholders'
                                    shares    Amount  Capital   carryover basis   Stock Sale   (Deficit)   Adjustment      Equity
                                   --------- ------- ---------- ---------------- -----------   ---------- ------------ -------------
<S>                                <C>        <C>    <C>          <C>             <C>          <C>          <C>          <C>       
Balance, January 28, 1995......... 2,394,632 $ 24   $ (19,237)   $ (24,390)      $ (1,001)    $ (12,146)   $   (334)     $ (57,084)
  Net income (loss)...............     -       -         -           -                -          14,251       -             14,251
  Dividends on Series C 
   Preferred Stock................     -       -         -           -                -            (717)      -               (717)
  Foreign currency 
   translation adjustment.........     -       -         -           -                -            -           (413)          (413)
  Exercise of stock options.......    47,940   -          444        -                -            -          -                444
  Issuance of Common Stock........ 2,500,000   25      30,133        -                -            -          -             30,158
  Conversion of Series C 
   Preferred Stock to 
   Common Stock................... 2,581,784   26      36,119        -                -         (10,000)      -             26,145
                                   ---------  ---   ---------    ----------      ----------    -----------  ----------   ----------
Balance, February 3, 1996......... 7,524,356   75      47,459      (24,390)        (1,001)       (8,612)       (747)        12,784
  Net income (loss)...............     -       -        -            -                -          (8,604)      -             (8,604)
  Foreign currency translation                                                                                           
   adjustment.....................     -       -        -            -                -            -            (19)           (19)
  Exercise of stock options.......    34,482    1         235        -                -            -          -                236
                                   ---------  ---   ---------    ----------      ----------    -----------  ----------   ----------
Balance, November 2, 1996
 (unaudited)...................... 7,558,838 $ 76   $  47,694    $ (24,390)      $ (1,001)     $(17,216)   $   (766)      $  4,397
                                   ========= ====   =========    ==========      ==========   ===========  ==========    ==========
</TABLE>
                                   











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

                                              4
<PAGE>



                            FINLAY ENTERPRISES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>


                                                                     Thirteen Weeks Ended
                                                                 ----------------------------
                                                                 October 28,      November 2,       
                                                                    1995             1996          
                                                                 -----------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                              <C>             <C>           
  Net income (loss)............................................. $   (2,760)     $   (2,637)
  Adjustments to reconcile net income (loss) to net cash 
      used in operating activities:                                                                        
  Depreciation and amortization.................................      2,621           3,047
  Imputed interest on debentures................................      1,887           2,122
  Other, net....................................................       (387)           (695)
  Changes in operating assets and liabilities:
      Increase in accounts and other receivables................       (653)           (513)
      Increase in merchandise inventories.......................    (34,994)        (40,535)
      (Increase) decrease in prepaid expenses and other.........       (583)          1,298
      Increase in accounts payable and accrued liabilities......     34,417          21,205
                                                                  -----------    ------------
        NET CASH USED IN OPERATING ACTIVITIES...................       (452)        (16,708)
                                                                  -----------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of equipment, fixtures and leasehold improvements...     (3,293)         (5,254)
  Other, net....................................................       (980)           (152)
                                                                  -----------    ------------
        NET CASH USED IN INVESTING ACTIVITIES...................     (4,273)         (5,406)
                                                                  -----------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from revolving credit facility.......................    100,337         116,104
  Principal payments on revolving credit facility...............    (96,443)        (94,070)
  Other, net....................................................        (12)             31
                                                                  -----------    ------------
        NET CASH PROVIDED FROM FINANCING ACTIVITIES.............     3,882          22,065
                                                                  -----------    ------------
        EFFECT OF EXCHANGE RATE CHANGES ON CASH.................       (141)            (30)
                                                                  -----------    ------------
 
        DECREASE IN CASH AND CASH EQUIVALENTS...................       (984)            (79)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..................      2,459           1,731
                                                                  -----------    ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD........................  $   1,475       $   1,652      
                                                                  ===========    ============

Supplemental disclosure of cash flow information:
  Interest paid.................................................  $   1,764       $   8,934
  Income taxes paid.............................................      1,971           2,392
</TABLE>














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

                                              5
<PAGE>



                            FINLAY ENTERPRISES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                    Thirty-Nine Weeks Ended
                                                                  ----------------------------
                                                                  October 28,      November 2,       
                                                                     1995             1996          
                                                                  -----------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                               <C>             <C>         
  Net income (loss).............................................. $   (4,970)     $    (8,604)
  Adjustments to reconcile net income (loss) to net cash 
     used in operating activities:                                                                          
  Depreciation and amortization..................................      8,028            9,042
  Imputed interest on debentures.................................      5,696            6,244
  Other, net.....................................................       (978)          (1,211)
  Changes in operating assets and liabilities:
     Increase in accounts and other receivables..................    (18,366)         (16,035)
     Increase in merchandise inventories.........................    (57,117)         (53,500)
     Increase in prepaid expenses and other......................     (1,287)            (344)
     Decrease in accounts payable and accrued liabilities........    (44,254)         (47,188)
                                                                  -----------     ------------
        NET CASH USED IN OPERATING ACTIVITIES....................   (113,248)        (111,596)
                                                                  -----------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of equipment, fixtures and leasehold improvements....     (9,505)         (12,478)
  Other, net.....................................................     (1,394)            (251)
                                                                   -----------     ------------
        NET CASH USED IN INVESTING ACTIVITIES....................    (10,899)         (12,729)
                                                                  -----------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from revolving credit facility........................    365,319          376,525
  Principal payments on revolving credit facility................   (287,460)        (276,546)
  Repurchase of debentures.......................................     (5,789)          -
  Net proceeds from initial public offering of common stock......     30,158           -
  Other, net.....................................................       (175)              35
                                                                  -----------     ------------
        NET CASH PROVIDED FROM FINANCING ACTIVITIES..............    102,053          100,014
                                                                  -----------     ------------
        EFFECT OF EXCHANGE RATE CHANGES ON CASH..................        (39)             (51)
                                                                  -----------     ------------
 
        DECREASE IN CASH AND CASH EQUIVALENTS....................    (22,133)         (24,362)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...................     23,608           26,014
                                                                  -----------     ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD......................... $    1,475     $      1,652
                                                                  ===========     ============

Supplemental disclosure of cash flow information:
  Interest paid.................................................. $   11,939     $    19,407
  Income taxes paid..............................................      8,194           8,717

</TABLE>








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





                                              6
<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  ("Finlay  Jewelry"),  have been
prepared in accordance with generally accepted accounting principles for interim
financial  information.  References to "Finlay" mean collectively,  the Company,
Finlay Jewelry and all predecessor businesses.In the opinion of management,  the
accompanying  unaudited consolidated financial statements contain all normal and
recurring  adjustments necessary to present fairly the financial position of the
Company as of November 2, 1996, and the results of operations and cash flows for
the thirteen weeks and thirty-nine  weeks ended October 28, 1995 and November 2,
1996. 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 February  3, 1996  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.

     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 February 3, 1996
("Form  10-K"),  previously  filed.  

     Finlay's fiscal year ends on the Saturday closest to January 31. References
to 1993,  1994, 1995 and 1996 relate to the fiscal years ended or ending January
29, 1994, January 28, 1995, February 3, 1996 and February 1, 1997, respectively.
Each of the fiscal years includes  fifty-two  weeks except 1995,  which includes
fifty-three weeks. Certain prior year balances have been reclassified to conform
with the current year presentation.

NOTE 2 -  DESCRIPTION  OF  BUSINESS  

     Finlay is a retailer of fine jewelry  products and the leading  operator of
leased fine jewelry  departments  in department  stores in the United States and
France.  Finlay also  operates  leased fine  jewelry  departments  in the United
Kingdom and Germany. A significant portion of Finlay's revenues are generated in
the fourth quarter due to the seasonality of the retail industry.  Approximately
71% of  Finlay's  domestic  sales in 1995  were  from  operations  in two  major
department store groups of which 48% represents Finlay's domestic sales from one
department store group.

NOTE 3 - MERCHANDISE INVENTORIES

  Merchandise inventories consisted of the following:
<TABLE>
<CAPTION>

                                                                                 (unaudited)
                                                                  February 3,     November 2,
                                                                    1996             1996
                                                                 ------------   ------------
                                                                        (in thousands)
     Jewelry goods - rings, watches and other fine jewelry                                  
<S>                                                              <C>             <C>        
        (specific identification basis)....................      $  202,860      $   257,000
     Less:  Excess of specific identification cost over
        LIFO inventory value...............................           6,934            7,533
                                                                 -------------   -----------
                                                                 $  195,926      $   249,467
                                                                 =============   ===========
</TABLE>
 



                                              7
<PAGE>



                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - MERCHANDISE INVENTORIES (continued)

     The LIFO method had the effect of  decreasing  income  (loss) before income
taxes for the  thirteen  weeks ended  October  28, 1995 and  November 2, 1996 by
$206,000 and $208,000,  respectively. The effect of applying the LIFO method for
the  thirty-nine  weeks  ended  October  28,  1995 and  November  2, 1996 was to
decrease   income   (loss)   before  income  taxes  by  $582,000  and  $599,000,
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  $199,079,000  and  $214,832,000  at  February  3,  1996  and
November 2, 1996, respectively,  of merchandise received on consignment has been
excluded  from  Merchandise   inventories  and  Accounts  payable-trade  in  the
accompanying Consolidated Balance Sheets.

     The cost to Finlay of gold merchandise sold on consignment, which typically
varies  with the price of gold,  is not fixed  until the sale is reported to the
vendor  following the sale of the  merchandise.  Finlay  frequently  enters into
futures  contracts,  based upon the anticipated  sales of gold product,  such as
options or  forwards,  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 October 28, 1995 and
November 2, 1996, the gain/loss on open futures contracts was not material.

     In August 1995,  Finlay Jewelry  consummated a gold  consignment  agreement
(the "Gold  Consignment  Agreement")  with Rhode Island  Hospital Trust National
Bank  ("RIHT"),  which  matures  on  February  28,  1998.  The Gold  Consignment
Agreement  enables Finlay Jewelry to pay for  merchandise by providing  gold, or
otherwise  making payment,  to certain vendors who currently  supply Finlay with
merchandise on consignment.  While the merchandise  involved remains  consigned,
the consignor and title to the gold content of the merchandise  changes from the
vendors to RIHT.  Finlay  Jewelry can obtain,  pursuant to the Gold  Consignment
Agreement,  up to the lesser of (i) 85,000 fine troy ounces or (ii)  $25,000,000
worth of gold,  subject  to a  formula  as  prescribed  by the Gold  Consignment
Agreement.  At November 2, 1996, amounts  outstanding under the Gold Consignment
Agreement  totalled  46,409  fine troy  ounces,  valued at  approximately  $17.5
million. For financial statement purposes, the consigned gold is not included in
merchandise   inventories  on  the  Company's  consolidated  balance  sheet  and
therefore no related liability has been recorded.

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 the arrangements with host department stores. 

     Substantially  all of the 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 lessor in the
event such transfers  occur. 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.

                                              8
<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 (unaudited):
<TABLE>
<CAPTION>

                                                     Thirteen Weeks Ended         Thirty-Nine Weeks Ended
                                                     --------------------         -----------------------
                                                   October 28,    November 2,     October 28,   November 2,
                                                      1995            1996           1995           1996
                                                   ---------      ----------       ---------    ----------
                                                          (in thousands)                (in thousands)

<S>                                                <C>            <C>             <C>           <C>      
Minimum fees.......................                $   2,181      $  1,290        $  6,163      $   3,727
Contingent fees....................                   19,226        20,476          55,022         60,918
                                                   ---------      ---------       ---------     ----------
     Total.........................                $  21,407      $ 21,766        $ 61,185      $  64,645
                                                   =========      =========       =========     ==========
</TABLE>
                                    

     Future  minimum  payments  under  noncancellable  operating  leases  having
initial or  remaining  noncancellable  lease  terms in excess of one year are as
follows:

                                                       (in thousands)
     1996.........................................         $   6,188
     1997.........................................             3,804
     1998.........................................             2,679
     1999.........................................             2,381
     2000.........................................             2,200
     Thereafter...................................            11,600
                                                         -----------
     Total minimum payments required..............        $   28,852
                                                         -----------


     Minimum  payments  shown  above have not been  reduced by minimum  sublease
payments of $253,000 due in the future under noncancellable  subleases. 

NOTE 5 - INITIAL PUBLIC  OFFERING AND RELATED  TRANSACTIONS 

     On April 6, 1995,  the Company  completed an initial  public  offering (the
"Offering")  of  2,500,000  shares of its Common  Stock at a price of $14.00 per
share.  An  additional  115,000  shares  were  sold  by  non-management  selling
stockholders.  Net proceeds from the Offering after  deducting the  underwriting
discount  of  $2,300,000  and  estimated  expenses  of  $2,500,000  incurred  in
connection with the Offering,  were  $30,200,000.  The net proceeds were used to
repurchase  $6,103,000  accreted  balance of the Company's  12% Senior  Discount
Debentures  due 2005  (the  "Debentures")  at a price  equal to  $5,789,000,  or
approximately  95% of the accreted amount.  The balance of the net proceeds were
used to reduce a portion  of the  outstanding  indebtedness  ("Revolving  Credit
Reduction")   under  Finlay's   $135,000,000   Revolving  Credit  Facility  (the
"Revolving  Credit Facility") with General Electric Capital  Corporation  ("G.E.
Capital"),  which was accounted for as a capital contribution to Finlay Jewelry.

     Immediately  prior  to  completion  of the  Offering,  the  holders  of the
Company's 10% Series C Cumulative  Preferred Stock ("Series C Preferred  Stock")
exchanged all  outstanding  shares of Series C Preferred  Stock with the Company
for 2,581,784 shares of Common Stock (the "Series C Exchange").  For purposes of
the Series C Exchange,  the outstanding  Series C Preferred Stock was (i) valued
at its liquidation  value of $30,000,000  plus  $6,145,000 of accrued  dividends
through  the date of  completion  of the  Series C  Exchange,  paid in kind at a
quarterly rate of 2.5% and (ii) exchanged for Common Stock at the initial public
offering price of $14.00 per


                                9
<PAGE>



                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 -INITIAL PUBLIC OFFERING (continued)

share.   In  conjunction   with  the  Series  C  Exchange,   a  $10,000,000
nonrecurring  noncash charge representing the difference between the liquidation
value and the  carrying  value of the  Series C  Preferred  Stock was  recorded,
decreasing net income (loss) applicable to common shares in the first quarter of
1995.

     G.E.  Capital  agreed to reduce the interest rate on the  Revolving  Credit
Facility by 0.5% concurrent with the Offering.  Finlay and G.E.  Capital amended
the  Revolving  Credit  Facility  in March,  1995  pursuant to which the Company
became a co-obligor with Finlay Jewelry under the Revolving Credit Facility with
respect  to a  portion  of  the  borrowings  thereunder.  Borrowings  under  the
Revolving  Credit Facility at November 2, 1996 were $99,979,000 and are included
in the Notes payable caption on the accompanying Consolidated Balance Sheet.

     In connection with and prior to the Offering and the related  transactions,
the Board of  Directors  approved  a change in the  Company's  capital  stock to
authorize  25,000,000 shares of Common Stock, par value $.01 per share. On March
7, 1995, the Company  effected a two-for-three  stock  combination of its issued
and  outstanding  Common Stock (the "Reverse  Stock Split").  The  Stockholders'
equity has been  retroactively  restated  to reflect  the impact of the  Reverse
Stock Split.

NOTE 6 - UNAUDITED PRO FORMA AND SUPPLEMENTAL  FINANCIAL  INFORMATION 

     The following  table  presents the  calculation  of pro forma  earnings per
share data for the  thirty-nine  weeks  ended  October 28,  1995.  The pro forma
consolidated  financial  information  gives  effect to the  Offering and related
transactions  as if such  transactions  had  occurred  at the  beginning  of the
period. The pro forma consolidated  financial information also excludes proceeds
of $5.0 million  from a life  insurance  policy  Finlay  maintained  on a senior
executive,  which was recorded in the second  quarter of 1995. Net income (loss)
was derived by adjusting the historical  amounts to reflect  interest expense on
the adjusted debt structure and the related income tax effects thereon.


In thousands, except share and
per share amounts

<TABLE>
<CAPTION>

                                                                  Thirty-Nine
                                                                  Weeks Ended
                                                                  -----------

Net income (loss) applicable to common shares per
<S>                                                               <C>         
     Consolidated Statements of Operations .................      $   (15,687)
Add:    Dividends and amortization of discount on 
          Preferred Stock and accretion on conversion of
          Preferred Stock...................................           10,717
Add:    Interest expense reduction, net of tax, as a 
          result of the adjusted debt structure.............              474
Less:   Eliminate life insurance proceeds...................           (5,000)
                                                                  ----------- 
                                                                 
Pro Forma net income (loss).................................      $    (9,496)
                                                                  =========== 
Weighted average shares:
Weighted average shares - Common (1)........................        2,291,781
Common shares - Offering  (2)...............................        2,500,000
Common share - Series C Exchange (3)........................        2,581,784
Common stock equivalent pursuant to APB 15 (4)..............           70,670
                                                                  -----------
Total weighted average shares...............................        7,444,235
                                                                  ===========
Net income (loss) per share applicable to common shares.....      $     (1.28)
                                                                  =========== 
</TABLE>
                                                                 






                                              10
<PAGE>



                            FINLAY ENTERPRISES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - UNAUDITED PRO FORMA AND SUPPLEMENTAL FINANCIAL INFORMATION
                     (continued)

____________________                          
(1)  The weighted average shares outstanding are based on the number of shares 
     of Common Stock issued and outstanding.
(2)  Shares of Common Stock sold in connection with the Offering.
(3)  Shares of Common Stock issued in connection with the Series C Exchange.
(4)  In accordance with APB 15, the common stock equivalents were calculated
     by applying  the  treasury  stock  method,  and limiting the number of 
     shares of Common Stock obtainable upon exercise of outstanding options and
     warrants in the aggregate  to 20% of the number of shares  outstanding at
     the end of the period for which the computation is being made.


     Excluding  the effect of the  Revolving  Credit  Reduction and the interest
rate reduction on the Revolving  Credit Facility and including the effect of the
proceeds from life insurance,  net income (loss) per share  applicable to common
shares, on a supplemental basis, would have been a loss of $0.65 for the thirty-
nine weeks ended October 28, 1995.


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:


Statement of Operations Data
(unaudited)
<TABLE>
<CAPTION>

                                                       Thirteen Weeks Ended        Thirty-Nine Weeks Ended
                                                       --------------------        -----------------------
                                                     October 28,  November 2,      October 28,  November 2,
                                                        1995         1996             1995         1996
                                                     ----------   -----------      -----------  -----------
<S>                                                      <C>          <C>              <C>           <C>   
Sales..........................................          100.0%       100.0%           100.0%        100.0%
Cost of sales..................................           47.9         48.3             47.9          48.4
                                                     ----------   -----------      -----------  -----------
    Gross margin...............................           52.1         51.7             52.1          51.6
Selling, general and administrative expenses...           47.7         46.5             48.3          46.9
Depreciation and amortization..................            1.8          2.0              1.9           2.0
                                                     -----------  -----------      -----------  -----------
    Income (loss) from operations..............            2.6          3.2              1.9           2.7
Proceeds from life insurance...................             -            -              (1.3)           -
Interest expense, net..........................            5.8          6.0              5.9           5.8
                                                     -----------  -----------      -----------  -----------
    Income (loss) before income taxes..........           (3.2)        (2.8)            (2.7)         (3.1)
Provision (credit) for income taxes............           (1.1)        (0.9)            (1.3)         (1.0)
                                                     -----------  -----------      -----------  -----------
    Net income (loss)..........................          (2.1)%       (1.9)%            (1.4)%        (2.1)%
                                                     ===========  ===========      ===========  ===========  
</TABLE>
                                                


Thirteen Weeks Ended November 2, 1996 Compared with Thirteen Weeks Ended 
 October 28, 1995

     Sales.  Sales for the thirteen  weeks ended November 2, 1996 increased $4.1
million,  or 3.1%, over the comparable  period for 1995.  Comparable  department
sales (departments open for the same months during

                                              11
<PAGE>


comparable  periods)  increased 3.6%.  Sales decreased by $0.7 million as a
result of the net effect of new store openings offset by store closings, as well
as the timing of such  department  openings  and  closings.  During the thirteen
weeks  ended  November  2, 1996,  Finlay  opened 33  departments  and closed six
departments.  The openings included 17 departments  operated by Societe Nouvelle
d'Achat de Bijouterie - S.O.N.A.B  ("Sonab"),  a French subsidiary.  Included in
the Sonab openings were 15  departments in Monoprix S.A., a department  store in
France  ("Monoprix"),  one department in Debenhams,  P.L.C.,  a department store
chain  in the  United  Kingdom  ("Debenhams"),  and  one  department  in the new
Galeries Lafayette store in Berlin,  Germany.  The remaining 16 departments were
opened within existing domestic store groups.  The six department  closings were
also within existing domestic host store groups.

     Gross margin. Gross margin for the period increased by $1.6 million but, as
a percentage of sales,  gross margin  decreased 0.4% as a result of management's
efforts  to  increase  market  penetration  and  market  share  through  a  more
aggressive pricing strategy.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses  ("SG&A") as a percentage of sales decreased 1.2%. SG&A
increased $0.3 million or 0.4% due to additional expenses, primarily payroll and
lease fees  associated  with  increased  sales volume.  Although  these expenses
increased, the growth was at a slower rate than sales.

     Depreciation and amortization.  Depreciation and amortization  increased by
$0.4  million,  reflecting  $17.9 million in capital  expenditures  for the most
recent  12  months,  offset by the  effect  of  certain  assets  becoming  fully
depreciated.  The  increase  in  fixed  assets  was due to the  addition  of new
departments and the renovation of existing departments.

     Interest   expense,   net.  Interest  expense  increased  by  $0.5  million
reflecting an increase in average  borrowings  ($306.6 million for the period in
1996 compared to $285.6  million for the  comparable  period in 1995)  partially
offset by a lower weighted  average  interest rate (10.1% for the period in 1996
compared to 10.3% for the comparable period in 1995).

     Provision  (credit) for income taxes. The income tax provision for the 1995
and 1996 periods reflects the effective tax rate of 41.5%.

     Net income  (loss).  The net loss of $2.6  million  for the 1996 period was
$0.1  million  lower  than the net loss for the  comparable  period in 1995 as a
result of the factors discussed above.

     Thirty-Nine  Weeks Ended November 2, 1996 Compared with  Thirty-Nine  Weeks
Ended October 28, 1995

     Sales.  Sales for the  thirty-nine  weeks ended  November 2, 1996 increased
$23.8  million,  or 6.3%,  over  the  comparable  period  for  1995.  Comparable
department  sales  increased  6.3%.   Management  attributes  this  increase  in
comparable  department sales primarily to intensified promotion of key items and
best value programs as well as joint marketing efforts  coordinated with several
host store groups. Sales from the operation of net new departments  (departments
not  included  in  comparable  department  sales) was not  material.  During the
thirty-nine  weeks ended  November 2, 1996,  Finlay  opened 70  departments  and
closed 60 departments.  There were 31 openings within existing store groups.  In
addition,  Finlay  opened 13  departments  in the  Hecht's  division  of The May
Department  Stores  Company  ("May")  as a result  of May's  acquisition  of the
Strawbridge's  stores,  19  departments  in Monoprix  and seven  departments  in
Debenhams.  The closings  included 29  departments  in the  Emporium/Weinstock's
chain, which was acquired by Federated  Department Stores, Inc. and will operate
under the Macy's name, and eight  departments in The Jones Store Inc., which the
lessor  decided to  consolidate  with one lessee.  The remaining 23  departments
closed within existing host store groups.

     Gross margin.  Gross margin for the period  increased by $10.4 million but,
as  a  percentage  of  sales,  gross  margin  decreased  0.5%  as  a  result  of
management's  efforts to increase market  penetration and market share through a
more aggressive pricing strategy.

                                              12
<PAGE>


     Selling, general and administrative expenses. SG&A as a percentage of sales
decreased  1.4%.  SG&A  increased  $5.9  million,  or  3.2%,  due to  additional
expenses,  primarily  payroll and lease fees  associated  with  increased  sales
volume.  Although  these  expenses  grew,  the growth was at a slower  rate than
sales.

     Depreciation and amortization.  Depreciation and amortization  increased by
$0.9  million,  reflecting  $17.9 million in capital  expenditures  for the most
recent  12  months,  offset by the  effect  of  certain  assets  becoming  fully
depreciated.  The  increase  in  fixed  assets  was due to the  addition  of new
departments and the renovation of existing departments.

     Proceeds  from Life  Insurance.  The  Company  received,  during the second
quarter  of  1995,  proceeds  of  $5.0  million  from  a life  insurance  policy
maintained on a senior executive.

     Interest   expense,   net.  Interest  expense  increased  by  $1.1  million
reflecting an increase in average  borrowings  ($286.4 million for the period in
1996 compared to $274.0  million for the  comparable  period in 1995)  partially
offset by a lower weighted  average  interest rate (10.2% for the period in 1996
compared to 10.5% for the comparable period in 1995).

     Provision  (credit) for income taxes. The income tax provision for the 1995
and 1996 periods reflects the effective tax rate of 41.5%.

     Net income  (loss).  The net loss of $8.6  million  for the 1996 period was
$3.6  million  higher than the net loss for the  comparable  period in 1995 as a
result of the factors  discussed  above.  Excluding the effect of the receipt of
life  insurance  proceeds in 1995, the net loss of $8.6 million in 1996 compares
to a net loss of $10.0 million in 1995.

Liquidity and Capital Resources

     Finlay's capital requirements are primarily 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 and renovating
existing departments.  In addition, future working capital requirements would be
increased by further  international  expansion.  For the thirty-nine weeks ended
October  28, 1995 and  November  2, 1996,  capital  expenditures  totalled  $9.5
million and $12.5 million,  respectively.  Capital expenditures are estimated to
be approximately $17.0 million in 1996. Capital  expenditures are limited by the
terms of the Revolving Credit Facility.

     Finlay's  operations   substantially   preclude  consumer  receivables  and
approximately  50% of Finlay's  domestic  merchandise is carried on consignment.
Accordingly,  Finlay believes that  relatively  modest levels of working capital
are  required in  comparison  to many other  retailers.  The  Company's  working
capital  balance  was $59.4  million at  November  2, 1996,  a decrease  of $7.0
million from February 3, 1996. The decrease  resulted from capital  expenditures
and  the  impact  of  the  interim  net  loss  exclusive  of  depreciation   and
amortization. Based on the seasonal nature of Finlay's business, working capital
levels  typically  can be expected to  decrease on an interim  basis  during the
first three quarters of a year. See "- Seasonality."

     The seasonality of Finlay's business causes working capital requirements to
reach their highest level in the months of October and November in  anticipation
of the holiday shopping season.  Accordingly,  Finlay experiences  seasonal cash
needs as inventory  levels peak. The Revolving Credit Facility with G.E. Capital
provides Finlay with a line of credit of up to $135.0 million which is available
to finance  seasonal cash and other working capital needs.  The Revolving Credit
Facility  bears interest at a rate equal to, at Finlay's  option,  (i) the Index
Rate (as defined in the Revolving  Credit  Facility)  plus l.0% or (ii) adjusted
LIBOR plus 2.0%.  Pursuant to the Debenture  indenture,  the Company has pledged
all of the issued and outstanding  shares of capital stock of Finlay Jewelry for
the benefit of the Debenture holders. Pursuant to the Revolving Credit Facility,
Finlay  Jewelry  has  pledged  or caused to be  pledged  all of the  issued  and
outstanding capital stock (or other equity

                                              13
<PAGE>


securities)  of each of its direct  and  indirect  subsidiaries  (including
Sonab Holdings,  Inc., Sonab  International,  Inc. and Sonab) for the benefit of
the lenders under the Revolving Credit Facility.

     Finlay is required to reduce the balance of the Revolving  Credit  Facility
in each year to $10.0  million  or less for a 20  consecutive  day  period,  and
immediately  thereafter  to zero for an  additional  10  consecutive  days  (the
"Balance Reduction Requirement"). Borrowings under the Revolving Credit Facility
at November 2, 1996 were $100.0  million  compared to a zero balance at February
3, 1996,  pursuant to the Balance  Reduction  Requirement,  and $77.9 million at
October 28, 1995. The average amounts  outstanding  were $73.5 million and $79.6
million for the  thirty-nine  weeks ended October 28, 1995 and November 2, 1996,
respectively. The maximum amount outstanding under the Revolving Credit Facility
during the thirty-nine weeks ended November 2, 1996 was $110.0 million.

     Simultaneously  with the  acquisition  of Sonab on October 28,  1994,  G.E.
Capital  agreed to provide  additional  financing by  increasing  the  Revolving
Credit  Facility from $110.0  million to $135.0  million.  The Company  believes
that, with the increased  borrowing capacity under the Revolving Credit Facility
resulting from the Revolving Credit  Reduction,  it has sufficient  liquidity to
meet Sonab's anticipated working capital requirements.  In addition, the Company
believes that it has sufficient  liquidity to meet  anticipated  working capital
requirements  relating  to (i) the  operation  of the  outlet  stores,  (ii) the
operation of the seven departments in Debenhams and (iii) the planned opening in
the fourth  quarter of 1996 of 10  additional  departments  in Monoprix  and the
operation of 15 such departments, which opened during the third quarter of 1996.

     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 1995,  Finlay  had an average
balance of consignment  merchandise of  $208.5 million  from over 200 vendors as
compared  to an average  balance of  $194.2 million  in 1994.  As of November 2,
1996,  $214.8  million of  consignment  merchandise  was on hand as  compared to
$199.1 million at February 3, 1996 and $220.1 million at October 28, 1995.
 
     On April 13, 1995, the Company  received net proceeds of $30.2 million as a
result of the  Offering  of  2,500,000  shares of its Common  Stock.  Of the net
proceeds,  $5.8 million was utilized to repurchase $6.1 million accreted balance
of  Debentures.  The  balance of the net  proceeds  were  contributed  to Finlay
Jewelry  by  reducing  a  portion  of the  outstanding  indebtedness  under  the
Revolving Credit Facility.
 
     A  substantial  amount  of  operating  cash  flow of  Finlay  is or will be
required to pay,  directly or  indirectly,  interest with respect to the 10 5/8%
Senior Notes due 2003 of Finlay  Jewelry (the  "Notes") and the  Debentures  and
amounts due under the Revolving  Credit  Facility.  As of November 2, 1996,  the
Company's  outstanding  borrowings were $309.2  million,  which included a $74.2
million balance under the  Debentures,  a $135.0 million balance under the Notes
and a $100.0 million balance under the Revolving Credit Facility. The Debentures
do not pay cash interest until November 1, 1998.

     In August 1995, Finlay Jewelry  consummated the Gold Consignment  Agreement
with RIHT.  The Gold  Consignment  Agreement  enables  Finlay Jewelry to pay for
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) 85,000 fine troy ounces or (ii) $25,000,000 worth of gold, subject
to a formula as prescribed  by the Gold  Consignment  Agreement.  At November 2,
1996, amounts  outstanding under the Gold Consignment  Agreement totalled 46,409
fine troy ounces, valued at approximately $17.5 million.

     Finlay believes that, based upon current  operations,  anticipated  growth,
availability   under  the  Revolving   Credit   Facility  and  the   anticipated
availability  of  additional  debt  financing,  Finlay  Jewelry  will,  for  the
foreseeable  future,  be able to meet its debt service and  anticipated  working
capital obligations, and to make distributions to

                                              14
<PAGE>


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.  The Revolving  Credit  Facility,  the Note
indenture and the Gold Consignment Agreement restrict  distributions from Finlay
Jewelry to the Company to 0.25% of Finlay  Jewelry's net sales for the preceding
fiscal year. The amounts  required to satisfy the aggregate of Finlay  Jewelry's
interest expense and required  amortization  payments totalled $12.9 million and
$19.7 million for the  thirty-nine  weeks ended October 28, 1995 and November 2,
1996,  respectively.  As a result of the closing date for the quarter  under the
retail calendar,  the 1996 period includes two semiannual interest payments with
respect to the Notes of $7.2 million each, whereas the comparable period in 1995
includes only one payment of $7.2 million.

     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  of  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, 1995 (the  Company's  tax year
end), a NOL for tax purposes of approximately  $16.0 million which is subject to
an annual limit of approximately $2.0 million per year. For financial  reporting
purposes, no NOLs existed as of February 3, 1996.

Seasonality

     Finlay's business is highly seasonal,  with peak sales occurring during the
fourth   quarter  of  each   year,   which   includes   the   Christmas   season
(November/December).  The  fourth  quarter  accounted  for an  average of 42% of
Finlay's  annual  sales and  approximately  92% of its  income  from  operations
(excluding  nonrecurring  charges)  for 1993,  1994 and 1995.  Accordingly,  the
results for any of the first three quarters of a year, taken  individually or in
the  aggregate,  are not  indicative  of  annual  results.  Generally,  Finlay's
operations  during the first three  quarters of a year are financed by increased
borrowings under the Revolving Credit Facility.

Inflation

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

                                              15
<PAGE>


PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

   A.      Exhibits

     2   Not applicable.

     4   Not applicable.

    10   Not applicable.

    11   Computation of earnings per share.
 
    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


  None.

                                              16
<PAGE>



                                   SIGNATURES


     Pursuant to the  requirements  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.



                                    FINLAY ENTERPRISES, INC.



Date: December 13, 1996             By: /s/ Barry D. Scheckner                
                                        ------------------------------------  
                                        Barry D. Scheckner, Senior Vice
                                        President and Chief Financial
                                        Officer
                                        (As both a duly authorized officer of
                                        Registrant and as principal financial
                                        officer of Registrant)

                                       17