SecProbe.io

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0308

         DIVISION OF
CORPORATION FINANCE

Mail Stop 03-08

July 21, 2005

Bruce Zurlnick
Senior Vice President, Treasurer and Chief Financial Officer
Finlay Enterprises, Inc.
529 Fifth Avenue
New York, NY  10017

	Re: 	Finlay Enterprises, Inc.
      Finlay Fine Jewelry Corporation
		Form 10-K for the Fiscal Year Ended January 29, 2005
		Form 10-Q for the Fiscal Quarter Ended April 30, 2005
		File No.  0-25716

Dear Mr. Zurlnick:

      We have reviewed the above referenced filings and have the
following comments.  We have limited our review to only your
financial statements and related disclosures and do not intend to
expand our review to other portions of your documents.  Where
indicated, we think you should revise your documents in response
to
these comments in future filings.  If you disagree, we will
consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Item 6.  Selected Consolidated Financial Data, page 15

1. We note that you present non-GAAP financial measures on a per
share basis.  In future filings, please revise your disclosures to
omit non-GAAP measures on a per share basis.  See ASR 142 as well
as
Question 11 from the Frequently Asked Questions Regarding the Use
of
Non-GAAP Financial Measures, which can be found on the SEC
website.

2. We note that the term pro forma is generally associated with
Article 11 of Regulation S-X.  Please change the term pro forma to
another term, such as "adjusted EBITDA", and "adjusted income from
continuing operations".

3. With regard to footnote (3), make sure your disclosure in
future
filings quantifies the impact on gross margin of the change in
accounting principle.

4. With regard to footnote (9), you state that you present EBITDA
as
it, "provides additional information for determining our ability
to
meet future debt service requirements."  This implies that EBITDA
is
used as a liquidity measure.  If EBITDA is a liquidity measure,
Item
10(e)(1)(i) of Regulation S-K requires you to reconcile the
measure
with the most directly comparable financial measure calculated and
presented in accordance with GAAP.  You include a reconciliation
of
EBITDA to Income from operations as a financial measure, but if
EBITDA is also used as a liquidity measure, you should reconcile
to
operating cash flows or whatever directly comparable cash flow
measure exists in GAAP.

5. Since you indicate that you use pro forma EBITDA and pro forma
net
income as measures of performance, please revise your filing to
include the following items:

* The manner in which management uses the non-GAAP measure to
conduct
or evaluate its business;
* The economic substance behind management`s decision to use such
a
measure;
* The material limitations associated with use of the non-GAAP
financial measure as compared to the use of the most directly
comparable GAAP financial measure;
* The manner in which management compensates for these limitations
when using the non-GAAP financial measure; and
* The substantive reasons why management believes the non-GAAP
financial measure provides useful information to investors.

See Question 8 from the Frequently Asked Questions Regarding the
Use
of Non-GAAP Financial Measures, which can be found on the SEC
website.

Critical Accounting Policies, page 33

6. Your discussion of critical accounting policies should include
quantification of the underlying accounts and a discussion of
changes
and trends associated with the underlying accounts. For example,
your
discussion of merchandise inventories should quantify the amount
of
expenses that you recorded in each period for allowances and
discuss
any trends or significant changes. Your discussion of asset
impairments should discuss any impairments incurred as well as the
reasons for significant changes and trends.  Your discussion of
revenue recognition should highlight any changes in historical
sales
return rates or the lack of any changes.

7. It is not clear why vendor allowances would constitute a
critical
accounting policy. Please tell us what significant judgment and
estimates are required in your accounting for vendor allowances.
Your
current disclosure conveys a general business risk that you may
not
receive favorable pricing from vendors. Such disclosure may be
more
appropriate elsewhere in your filing. Additionally, to the extent
that there have been significant changes in allowances received
from
vendors, these changes should be quantified and discussed in the
management`s discussion and analysis section of your filing.

8. Your discussion of your policy for goodwill is vague and it is
not
clear that you adhere to the requirements of SFAS 142.
Specifically,
you state that goodwill impairment may result if your future cash
flows are not sufficient to permit recovery of the carrying value.
We
note that goodwill impairment is assessed by a comparison of the
carrying amount with fair value. Furthermore, there are different
methods used to assess fair value, one of which is to use
discounted
future cash flows. Your disclosure should be revised to more
specifically address the requirements of SFAS 142, and significant
changes in the fair value of your goodwill during the periods
presented and the significant estimates and judgments that are
required (e.g. it is difficult to asses the fair value of your
goodwill and typically requires an analysis of discounted cash
flows
which necessitates estimates of future cash flows and the use of
an
appropriate discount rate).

Item 7A. Quantitative and Qualitative Disclosures About Market
Risk,
page 38

9. Revise your discussion of commodity risk to comply with one of
the
three disclosure alternatives permitted by Regulation S-K Item
305.
These disclosure alternatives include a tabular presentation, a
sensitivity analysis, or value at risk disclosures.

Item 15.  Exhibits, Financial Statement Schedules, page 50

General

10. We note that you have several product categories for which
discrete financial information is available.  Tell us, and
disclose
in future filings, how you identify the enterprise`s reportable
segments, including the basis of organization and whether
operating
segments have been aggregated.  See paragraph 10 of FAS 131 for
the
definition of an operating segment and paragraphs 25-26 for
disclosure requirements.

Note 3 - Merchandise Inventory, F-12

11. We note that you changed your method of determining price
indices
used in the valuation of LIFO inventories during the third quarter
of
2004.  Please explain to us further why the newly adopted
internally
developed indices are preferable over the previously selected
producer price indices published for jewelry and watches by the
BLS.
See paragraph 17 of APB 20.  Additionally, it is unclear from your
disclosure if you account for this change as a change in
accounting
principle or change in accounting estimate.  If you account for
the
accounting change as a change in accounting principle, make sure
your
disclosure specifically states so and follows the disclosure
guidelines of paragraphs 18-30 of APB 20.

12. Please include Schedule II for all valuation and qualifying
accounts in accordance with Rules 5-04 and 12-09 of Regulation S-
X.
Specifically, if material, include a Schedule II for the allowance
for obsolete inventory and any other valuation and qualifying
accounts held by the Company.

Note 14 - Department Closings, F-24

13. We note that you closed stores as a result of the divestiture
of
Lord & Taylor by May.  Tell us if you classified the results of
operations from these stores as results from continuing operations
or
discontinued operations in the periods presented.  It appears that
you determined the store level is the lowest level at which the
operations and cash flows are clearly distinguished through the
classification of results as discontinued operations related to
the
Burdines department stores closings.  See paragraphs 41-43 of FAS
144.

*	*	*	*

      Please send us your response to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter keying your responses to our
comments
and provide any requested supplemental information.  Please file
your
response letter on EDGAR.  Please understand that we may have
additional comments after reviewing your responses to our
comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Dave Irving, Staff Accountant, at (202) 551-
3321 if you have questions regarding comments on the financial
statements and related matters.  Please contact me at (202) 551-
3841
with any other questions.

Sincerely,

Michael Moran
Branch Chief
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Mr. Bruce Zurlnick
Finlay Enterprises, Inc.
July 21, 2005
Page 5 of 5

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