Melart Jewelers Inc. is polishing its image, adding more sparkle and glitter to the area's largest privately held jewelry chain in an attempt to attract the customer who can afford higher-priced jewelry.

Reappraising its position in the increasingly affluent Washington-area market, Melart's new management team -- headed by a descendant of one of the founders -- is redesigning its stores and offering higher-quality goods.

Gone are the inexpensive pencil sharpeners, 99-cent hand-blown crystal baskets and stoneware soup bowls. In their place the store is offering higher-priced jewelry to tempt a more prosperous clientele.

Steadily, store by store, Melart is eliminating elaborate French provincial fixtures, including ornate columns and cabinets and drapes that characterized its stores, and replacing them with more fashionable bold brass lights, softer color schemes and streamlined glass cabinets.

With the new look comes the first catalogue the 35-year-old company has produced on its own. It advertises more expensive jewelry than Melart has traditionally promoted, including some limited-edition, specially designed half-carat diamond rings that retail for $1,600. Diamonds are Melart's specialty, accounting for more than half its sales.

"We're trying to stretch up higher, to pick up more affluent customers, more profession-als, while still trying to hold on to our longtime customers," said Albert (Bert) Foer, 40, who assumed Melart's chairmanship when his father Melvin died a year ago. Arthur Sheinbaum, 65, who co-founded Melart with Melvin Foer, continues to be involved in decision-making as president, but health problems have reduced his day-to-day role.

Such a transformation is not unusual in the jewelry business, noted Mitchell Gilbert, publisher of Accent, a jewelry industry trade magazine.

"This is typical of what you see happening when the second generation takes over a store," he said. "There is a great willingness to invest money in good-looking operations." For the most part, according to Gilbert, the founding parents pay little attention to a store's decor, pleased at just having built the business up from scratch.

"The children, however, are brought up in relatively more affluence than their parents," he said. "They look at these stores now and say they wouldn't want to shop in them. So they start building the operations into places where they would want to shop. I've seen it dozens of times before in this business."

Foer insists that many of the changes began in the late 1970s. However, he acknowledged, "the second generation is trying to reinvigorate the stores. We have a new sense of energy and a desire to have a new set of accomplishments."

Foer's father, Melvin, and his close boyhood friend Sheinbaum joined their two first names and created Melart in 1939 with a $200 investment, after concluding they could make more money with their own business than they could working for a downtown jeweler.

Initially, the two friends "operated the company out of my grandmother's back porch" in Northwest Washington, said Albert Foer. "They made most of their sales out of briefcases in federal office buildings and on the B&O Railroad. . . . It wasn't until 1945 that they opened their first store."

Today, the Silver Spring-based firm operates 18 stores, from Baltimore to Winchester, Va. Most of them are in suburban shopping malls, although the newest store -- and the prototype of the chain's new image -- is in downtown Washington, part of The Shops at National Place.

Melart's yearly sales total more than $11 million a year, with pretax profits close to the industry average of 2 percent of sales, according to industry estimates. Specific financial figures are not available, however, because Melart, as a privately held company, is not required to disclose its earnings.

Despite his health, Sheinbaum still comes to Melart's Silver Spring headquarters each day. The elder Foer died a year ago, just six months after his son had joined the firm intending to phase into his father's job.

Albert Foer said he had no intention of joining his father's business when he was growing up in Northwest Washington. "My earlier memories of the business were my mother and father being absent every fourth quarter. They were great parents most of the year, but in December they always disappeared" because of the busy Christmas shopping season, he said.

So Foer became an antitrust lawyer. He joined the Federal Trade Commission in the late 1970s when the agency was aggressively trying the expand the limits of the antitrust laws.

"As Art became ill and my father wanted to retire, it became apparent that something was going to have to be done," he said. "No one in the family wanted to sell the company. So, I decided I would like to give it a try."

Foer is not the only descendant in the firm. His sister, Laura Jaffe, is the company's chief appraiser and Sheinbaum's son Ron is director of administrative services.

Together, the first and second generations have "built a well-run operation that has a prestigious name in the industry," said Bob Paul, executive director of the Jewelers Board of Trade, the credit-rating bureau for the industry.

Melart takes pride in the fact that it is a local chain -- so much so that Sheinbaum recently objected to a newspaper article that called it a nationwide chain. "We want our customers to know we are a local institution. If they have problems, they can be taken care of right here," Foer said emphatically.

Foer cited the case of the man who bought his wife a sewing machine from Melart in 1959, when the stores sold shotguns and sheets as well as jewelry. The man had selected a sewing machine with a 25-year warranty. In 1983, when the man called the store to complain that the machine had suddenly started missing stitches, Melart took care of the problem, even though it no longer sold sewing machines, Foer said. It sent the machine to a local repair shop to be fixed and cleaned.

Despite the emphasis on local ties, Foer has ambitions to expand his chain beyond the immediate metropolitan area. Until recently, the chain increased its size by an average of one store every two years. In the future, Foer hopes to expand Melart by two to three stores a year, primarily to make sure the chain does not lose market share as a result of increased competition from other jewelry chains and department stores.

Because the pace of shopping mall construction in the area has slowed, Foer noted that the company will soon have to open stores beyond the metropolitan area to meet this goal. For the most part, Foer said, this growth will take place in nearby areas, such as Richmond and parts of Pennslyvania. The company may also increase its presence in Baltimore.

"We have no expectations of leapfrogging into other markets unless a particular acquisition opportunity comes along that can't be resisted," Foer said.

He acknowledged that Melart is "casually looking" for acquisitions and is in discussion with several different chains. However, he added, he doesn't expect acquisitions to occur anytime soon.

In the meantime, Foer is trying to make sure the chain doesn't lose any of its market to the growing number of competitors in the jewelry business, including the department stores and catalogue houses that are seeking a larger share of the market.

Despite increased competition, Foer predicts Melart will hold its own and continue to grow at a healthy rate. "The fact is that these stores are not offering the kind of service and expertise we can provide," he maintained. As the largest locally owned chain, the company will also have a competitive advantage over such national chains as Zale Corp., Gordon Jewelry and Kay Corp., he contended.

To help the company retain its edge, Foer has come up with a novel idea for a private company. He has created what amounts to an outside board of directors, comprised of the company's accountant, banker and lawyer as well as an area stockbroker and a consultant in strategic planning. This group of professionals meets quarterly to give the company "independent, impartial" advice, Foer said.

"We wanted to create a body of sympathetic outsiders who could help us plan the direction of the company," he said. The advisory panel, which has access to most of the company's financial data, has advised Melart on a variety of issues, ranging from its three-year plan on corporate restructuring to various new location possibilities. In one instance, Foer said, the panel convinced management that a plan to locate in a particular mall was not workable.

The panel "is a great opportunity to have a wide breadth of talented people with different experiences pitch in on the decision-making process," said Foer.

It is also a way to ease the transition of the company's management from the first generation to the second, said Foer.

"We've endured the difficulties of the death of one of the founders and the sickness of another. Now, we are moving forward to expand the company . . . into the mid-Atlantic's leading retailer of fine jewelry to the middle and upper classes."