It's just another one of those "Across the Pond" things. In the UK and Ireland the spelling is "jewellery" ( stuff made by a jeweller ), while in the US the standard spelling seems to be "jewelry" ( stuff made by a jeweler - again standard US spelling ). A search on Google.co.uk for "big costume jewelry" shows at #9 ( #13 on Google.com, with the English spelling at #5 ), so Google's semantics seem to have that covered. Obviously don't know what global reach the OP's site had, but at least this means that if it's fixed, it should be fixed globally.
If there has been no warning message on Google Webmaster Tools, there probably isn't a penalty involved, just a devaluation of many of the inbound links. Carstensch has laid out a good checklist for addressing this. As Clay said, linking from the logo, and a review of on-page keywords, synonyms etc would also help, although a brief look at the home page shows a good amount of occurrences of 'jewellery' and trade-related terms.
Given that the drop was sudden, and Google's stated intent with regard to dubious linking, I would concentrate on a "Google-friendly" ( I know, I hate that term too... ) link building campaign as outlined in the previous post.
PJ
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