Exhibit 10.5(d)

                 [Letterhead of Finlay Fine Jewelry Corporation]






                                                              February 1, 1999


Mr. David B. Cornstein
Penthouse A
430 East 56th Street
New York, New York  10022

Dear Mr. Cornstein:

     Reference  is made to the  Employment  Agreement  dated  May 26,  1993,  as
amended,  by and between Finlay Fine Jewelry Corporation (the "Company") and you
(the "Employment  Agreement").  It is acknowledged and agreed that, effective as
of the date hereof,  the term of employment under Section 2(a) of the Employment
Agreement has expired and that the Employment  Agreement is terminated and of no
further force and effect,  subject to the terms and conditions  hereinafter  set
forth.  Capitalized  terms  used  herein  which are  defined  in the  Employment
Agreement and not defined herein shall have the same meaning herein as therein.

     1.  You  shall  be  entitled  to  receive  by March  30,  1999  all  unpaid
compensation (including Base Salary and Incentive Compensation in respect of the
fiscal year ended January 30, 1999, if any), expense reimbursements and benefits
due to you through January 31, 1999 pursuant to the Employment Agreement, except
that no Severance Amount shall be due and owing to you. In addition, for the two
year period commencing on the date hereof, you shall continue to be entitled, as
if still  employed  under the  Employment  Agreement,  to all of the  health and
medical benefits  provided for therein,  including  payment for the catastrophic
health insurance referred to in Section 5(b) thereof.

     2. You shall continue to be bound by your  obligations set forth in Section
11 [covenant not to compete] and Section 12 [confidentiality],  respectively, of
the Employment Agreement; provided, however, that your obligations under Section
11 shall  terminate on January 31, 2003.  The Company  shall have all rights set
forth in Section 11 and 12 with regard to any breach by you of your  obligations
contained therein, including, without limitation, the right to obtain injunctive
relief in accordance with such sections.

<PAGE>

     3.  Your  rights  and  the   obligations   of  Finlay   Enterprises,   Inc.
("Enterprises")  and the  Company  pursuant  to the  provisions  of  Section  16
[indemnification]  of the  Employment  Agreement  shall survive the  termination
thereof.

     4. You shall  continue to be entitled,  commencing on the date hereof until
January 31, 2001, to serve as Chairman Emeritus of Finlay Enterprises, Inc.

     5. This Agreement  sets forth the parties'  final and entire  agreement and
supersedes any and all prior  understandings with respect to its subject matter.
This Agreement  shall bind and benefit the parties  hereto and their  respective
heirs,  successors  and assigns,  but no right or  obligation  hereunder  may be
assigned without the other party's prior written consent.  This Agreement cannot
be changed,  waived or terminated except by a writing signed by you, the Company
and  Enterprises  and shall be governed by and construed in accordance  with the
laws of the  State of New  York  applicable  to  contracts  made  and  performed
entirely within such state.

     If the foregoing  correctly sets forth your understanding of our agreement,
please so indicate by signing and returning to us a copy of this letter.

                                       Very truly yours,

                                       FINLAY FINE JEWELRY CORPORATION



                                       By: /s/ Arthur E. Reiner
                                       -----------------------------------------
                                       Name:  Arthur E. Reiner
                                       Title: Chairman & Chief Executive Officer
Accepted and Agreed to:


By: /s/ David B. Cornstein                        
    --------------------------------------------
    Name:  David B. Cornstein
    

Acknowledged and Agreed to:

FINLAY ENTERPRISES, INC.

By: /s/ Arthur E. Reiner                        
    --------------------------------------------
    Name:  Arthur E. Reiner
    Title: President and Chief Executive Officer