Finlay Enterprises will take a big hit from the Federated Department Stores merger, which will force it to shut 194 jewelry departments, leaving it with 404.

Most closings are the result of Federated’s eliminating the Marshall Field’s brand in favor of Macy’s East and West stores, where Finlay has not traditionally operated. Those stores accounted for about $242 million in revenue for fiscal year 2004, about a quarter of the company’s earnings.

“We are disappointed that our total store base will be reduced,” said the company’s chief executive officer, Arthur E. Reiner.

As a result of the realignment, Finlay also expects to add 11 new doors that could add some $15 million in new revenue.