The jewel in New York's crown

Jewellery: There can hardly be a name more synonymous with sparkle and glamour than that of Tiffany, New York's great 5th Avenue institution, now the second largest luxury jewellery company in the world. Immortalised by Truman Capote in the novel Breakfast at Tiffany's and by Audrey Hepburn in the movie version and identified by its signature blue boxes, its humble origins in l837 as a fancy goods store on Broadway are less familiar.

The lavishly illustrated Bejewelled by Tiffany traces its 150-year history through its jewellery and its success both in the US and in Europe.

Published to coincide with a major exhibition of Tiffany jewellery currently running in London, its showpiece is the celebrated Tiffany diamond, a rare, 128-carat yellow diamond in a "Bird on a Rock" setting by French emigré Jean Schlumberger. Discovered in South Africa in l877, this gigantic diamond was purchased rough for $18,000 and only ever worn by two women: Mrs Sheldon Whitehouse, at a Tiffany ball in l957, and, four years later, Audrey Hepburn. The book reveals how diamonds became core business at Tiffany's with many historic items, like the French crown jewels, purchased at a period of European turmoil.

Founded in New York by two school friends, Charles Lewis Tiffany and John Burnett Young, the company grew exponentially in tandem with the city's increasing fortunes. By l850, they were offering extensive ranges from European sources and had opened a Paris branch. With an instinctive flair for publicity and marketing, Charles Lewis Tiffany was the first to produce a mail-order catalogue offering a huge variety of items at various prices, from modest souvenir pieces of transatlantic cable mounted in brass to a richly jewelled depiction of a rippling US flag in gold, rubies, sapphires and diamonds.

Tiffany offered jewellery to mark all of life's transitions from baby armlets in fine gold mesh to mourning pendants and crosses in jet and onyx. Some of the most impressive and free spirited pieces in the exhibition are the transformations of everyday objects into jewelled works of art like the chased gold umbrella handles or the handsomely decorated sterling silver spurs that commemorated the 400th anniversary of the discovery of America by Christopher Columbus.

Participating in international exhibitions in Paris helped to build and consolidate the company's reputation for design and craftsmanship. Two of its greatest assets were the outstanding gemmologist George Frederick Kunz and resident designer Paulding Farnham. Paulding Farnham's virtuoso orchid brooches for the Paris exposition in l889 caused a sensation. His chrysanthemum brooch from 1904 set with American freshwater dog tooth pearls and diamonds was another strikingly beautiful piece. Kunz sourced native American gemstones like Montana sapphires and Mexican fire opals described by Oscar Wilde as "broken lights . . . harmonies and dissonances of colour" along with some 47 different stones for setting in rings. The Tiffany setting for a single diamond which allowed more light into the stone remains a classic to this day.

The book is divided into two parts; six introductory essays that often overlap and are sometimes unnecessarily repetitive and the 10-part catalogue tracing the chronological and creative development of the company illustrated by its exhibition pieces. Current creative director John Loring argues that the single greatest force in the creation of fashion jewellery which evolved alongside fashion design and photography was Jean Schlumberger. Schlumberger's clients were the most stylish, glamorous and socially prominent women of their time. Loring himself designed a brooch with a 107-carat canary diamond surmounted by perfect white diamonds priced at $l5m in l988, said to be the most extravagant diamond brooch of the 20th century. The book does not reveal who wore it.

A major section of the exhibition is devoted to Louis Comfort Tiffany, son of the founder, better known for his innovative iridescent "favrile" and stained glass. His jewellery drew on the Arts & Crafts movement and his love of nature expressed itself in botanical dragonfly brooches, moonstone necklaces and enamelled belt buckles. This period of naturalism was followed by Art Deco, a time of great affluence when, according to Queen magazine, "steamers begin to leave New York with more tonnage in jewels than anybody but Aladdin could believe in". The graphic, architectural lines of the time are brilliantly realised in a platinum and diamond necklace, whose stepped and streamlined layout echoed the the skyscrapers then being erected in New York.

Having weathered difficult years after the Wall Street crash, the company moved to its present flagship store on Fifth Avenue in l940. Acquired by the Hoving Corporation in l955, it was later purchased by Avon in l979 and a management buyout led by William Chaney took place in l984. Plans to bring its jewellery to a wider public were realised in l974 with the appointment of Elsa Peretti, a young Florentine former model and jewellery designer. Her simple, linear designs were strong, modern and sensual. Her most innovative creation was her Diamonds By the Yard, a fine gold chain dotted with diamonds while a halter top in silver mesh used the same process as gold mesh purses.

Her appointment ushered in a new era and attracted new buyers, women purchasing for their own pleasure and reward. Later Paloma Picasso continued to capture the modern spirit with her bold and graphic styles. This year marks not only Tiffany's most comprehensive exhibition, but also their collaboration with celebrated US architect Frank Gehry, uniting the worlds of architecture and jewellery and marking another milestone in this all-American company's star studded history.

Deirdre McQuillan is Fashion Editor of The Irish Times The exhibition of Tiffany jewellery runs at the Gilbert Collection in Somerset House in London until November 26th

Bejewelled by Tiffany l837-1987 By Clare Phillips. Yale University Press, 310pp. £45