DG Jewelry Demands Haymarket Retract Statements.

Business Editors

TORONTO--(BUSINESS WIRE)--Dec. 21, 2000

D.G. Jewelry Inc. (Nasdaq:DGJL), D.G. Jewelry Inc., one of North America's leading designers, manufacturers and distributors of stone-set jewelry, today announced that it has demanded a retraction and apology from Haymarket for false allegations made in a press release issued by Haymarket December 4, 2000, which was published on Bloomberg's web site.

D.G. Jewelry Inc. also stated that it is considering an action to recover damages for defamation against Haymarket unless a full unqualified public retraction and apology is forthcoming.

"Haymarket's statement of December 4, 2000 alleged that both D.G. Jewelry Inc. and its auditors have misled and continue to mislead shareholders," said Jack Berkovits, president and CEO of D.G. Jewelry. "This allegation is false and is categorically denied by D.G. Jewelry Inc."

In its release of December 4, 2000, Haymarket also continued to claim that a liquidated damages provision in the agreement involved in the litigation might result in D.G. Jewelry Inc. being ordered to pay Haymarket in excess of $12 million in liquidated damages. However, Haymarket failed to reveal that Justice Gammerman had already stated his preliminary view that, in the event the jury's verdict for D.G. Jewelry Inc. was not reinstated on appeal, damages would include the assessment of the statutory interest rate of 9% to any actual damages suffered by Haymarket rather than enforcing Haymarket's excessive liquidated damages clause.

D.G. Jewelry Inc. stands by the contents of its Press Release of November 22, 2000 which accurately disclosed that the jury in the recent trial in New York returned a verdict in favor of the D.G. Jewelry Inc., finding that Haymarket had been involved in a scheme to manipulate the price of D.G. Jewelry shares. As was clearly stated in D.G. Jewelry Inc.'s November 22, 2000 statement, the jury verdict was set aside by Justice Gammerman who directed a verdict in favor of Haymarket, but indicated that he would stay obligations under the directed judgment pending appeal of the judgment by D.G. Jewelry Inc. On December 13, 2000 -- after the issuance of D.G. Jewelry's November 22, 2000 press release and Haymarket's December 4, 2000 press release -- the court entered judgment for Haymarket, ordering the delivery of 316,933 shares of D.G. Jewelry stock to Haymarket, but staying that order for 30 days without prejudice to D.G. Jewelry's right to seek a further stay on the delivery of the shares. D.G. Jewelry Inc. plans on seeking a further stay on the delivery of the shares while it appeals the judgment in favor of Haymarket. D.G. Jewelry Inc. is confident that the judgment will be reversed on appeal.

D.G. Jewelry Inc. is primarily engaged in the design, merchandising and distribution of stone-set jewelry for department stores, mass merchants, catalog showrooms, television shopping networks and other high-volume retailers and other major discounters in the U.S., Canada and Europe. For more information, please visit us at www.dgjewelry.com.

Except for the historical information contained herein, the matters discussed in this release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to, risks in product demand, the impact of competitive products and pricing, changing economic conditions, both here and abroad, release and sales of new products, other risk factors detailed in the company's most recent annual report and filings with the Securities and Exchange Commission.