Finlay Enterprises announced it is in advanced discussions regarding a possible acquisition of Carlyle & Co, the 32-store chain. Carlyle has annual sales of approximately $80 million, the company said. Finlay is engaged in due diligence for the agreement. The acquisition is subject to negotiation and execution of a definitive merger agreement that will include closing conditions, the company said. "As we have stated in the past, reviewing acquisition candidates is part of our strategy to grow and diversify our business," said Arthur E. Reiner, Finlay chairman and chief executive officer. "We believe a business such as Carlyle would complement our existing operations." Company officials declined further comment.