SECURITIES AND EXCHANGE COMMISION
                              WASHINGTON, DC 20549
                              --------------------

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000     COMMISSION FILE NO. 1-9196

                          THE LESLIE FAY COMPANY, INC.

            DELAWARE                                      13-3197085
(STATE OF OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)


          1412 BROADWAY
       NEW YORK, NEW YORK                                     10018
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                    (ZIP CODE)


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 221-4000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

Yes   X    No
   -------   -------

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

Yes   X    No
   -------   -------

There were 5,081,138 shares of Common Stock outstanding at September 30, 2000.
================================================================================
<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


                                      INDEX
<TABLE>
<CAPTION>
                                                                                                           Page No.
<S>                                                           <C> <C>
PART I  - FINANCIAL INFORMATION

Item 1.  Financial Statements:

                  Consolidated Balance Sheets as of September 30, 2000 (Unaudited)
                     and January 1, 2000, respectively............................................................3

                  Consolidated Statements of Operations (Unaudited) for the
                     Thirty-Nine Weeks Ended September 30, 2000 and
                     October 2, 1999, respectively................................................................4

                  Consolidated Statements of Operations (Unaudited) for the
                    Thirteen Weeks Ended September 30, 2000 and
                    October 2, 1999, respectively.................................................................5

                  Consolidated Statements of Cash Flows (Unaudited) for the
                    Thirty-Nine Weeks Ended September 30, 2000 and
                    October 2, 1999, respectively.................................................................6

Notes to Consolidated Financial Statements........................................................................7

Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations............................................................11

Item 3.  Quantitative and Qualitative Disclosures

                  About Market Risk..............................................................................15
PART II  -  OTHER INFORMATION

Item 1.  Legal Proceedings.......................................................................................16
Item 2.  Changes in Securities...................................................................................16
Item 3.  Defaults Upon Senior Securities.........................................................................16
Item 4.  Submission of Matters to a Vote of Security Holders.....................................................16
Item 5.  Other Information.......................................................................................17
Item 6.  Exhibits and Reports on Form 8-K........................................................................17

SIGNATURES.......................................................................................................18

INDEX TO EXHIBITS...............................................................................................E-1
</TABLE>

                                      -2-
<PAGE>
                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


                           CONSOLIDATED BALANCE SHEETS
                   (IN THOUSANDS, EXCEPT PAR VALUE SHARE DATA)
<TABLE>
<CAPTION>

                                                                                     UNAUDITED             AUDITED
                                                                                    SEPTEMBER 30,         JANUARY 1,
                                ASSETS                                                  2000                 2000
                                                                                      --------             --------
Current Assets:
<S>                                                                                   <C>                    <C>
    Cash and cash equivalents.......................................                  $   755                $ 2,034
    Restricted cash and cash equivalents............................                    3,461                  3,432
    Accounts receivable- net of allowances for possible losses of
       $7,881 and $5,468, respectively..............................                   44,667                 16,952
    Inventories.....................................................                   25,851                 34,226
    Prepaid expenses and other current assets.......................                    1,810                  2,702
                                                                                     --------               --------
       Total Current Assets.........................................                   76,544                 59,346
    Property, plant and equipment, at cost, net of accumulated
       depreciation of $2,737 and $1,535, respectively..............                    4,488                  3,695
    Excess of purchase price over net assets acquired-net of
       accumulated amortization of $845 and $357, respectively......                    6,852                  4,330
    Deferred charges and other assets...............................                    3,922                  1,629
                                                                                     --------               --------
    Total Assets....................................................                 $ 91,806               $ 69,000
                                                                                     ========               ========

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Short term debt.................................................                $  16,192                $ 1,000
    Accounts payable................................................                   11,895                  9,454
    Accrued expenses and other current liabilities..................                    9,464                  8,121
    Accrued expenses and other current confirmation liabilities.....                    3,461                  3,432
    Income taxes payable............................................                      662                     --
    Current portion of capitalized leases...........................                       88                     40
                                                                                     --------               --------
       Total Current Liabilities....................................                   41,762                 22,047
    Long term note payable..........................................                    3,250                  4,000
    Excess of  revalued  net assets  acquired  over equity  under  fresh  -start
       reporting, net of accumulated amortization of $13,708
       and $11,811, respectively....................................                     --                    1,897
    Other long term liabilities.....................................                    1,229                    915
                                                                                     --------               --------
    Total Liabilities...............................................                   46,241                 28,859
                                                                                     --------               --------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $.01 par value; 500 shares authorized, no
     shares issued and outstanding...................................                      --                     --
Common stock, $.01 par value; 20,000 shares authorized;
      6,898 and 6,870 shares issued, respectively....................                      69                     69
 Capital in excess of par value.....................................                   32,515                 31,212
 Retained earnings..................................................                   24,604                 20,483
                                                                                     --------               --------
    Subtotal........................................................                   57,188                 51,764
 Treasury stock, at cost ; 1,817 shares.............................                   11,623                 11,623
                                                                                     --------               --------
    Total Stockholders' Equity......................................                   45,565                 40,141
                                                                                     --------               --------
 Total Liabilities and Stockholders' Equity.........................                 $ 91,806               $ 69,000
                                                                                     ========               ========
</TABLE>

       The accompanying Notes to Consolidated Financial Statements are an
              integral part of these consolidated balance sheets.

                                      -3-
<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                    UNAUDITED
<TABLE>
<CAPTION>

                                                                             THIRTY-NINE          THIRTY-NINE
                                                                             WEEKS ENDED          WEEKS ENDED
                                                                            SEPTEMBER 30,          OCTOBER 2,
                                                                                2000                 1999
                                                                            ---------              ---------
<S>                                                                          <C>                   <C>
Net Sales.......................................................             $173,281              $ 158,216
 Cost of Sales..................................................              133,718                116,923
                                                                            ---------              ---------
   Gross profit.................................................               39,563                 41,293
                                                                            ---------              ---------
Operating Expenses:
      Selling, warehouse, general and
          administrative expenses...............................               32,243                 29,284
   Non-cash stock based compensation............................                  643                  1,130
   Depreciation and amortization expense........................                1,566                    959
                                                                            ---------              ---------
       Total operating expenses.................................               34,452                 31,373
   Other income.................................................               (1,045)                (1,054)
   Amortization of excess revalued net assets acquired
         over equity............................................              (1,898)                 (3,429)
                                                                            ---------              ---------
   Total operating expenses, net................................               31,509                 26,890
                                                                            ---------              ---------
    Operating income.............................................               8,054                 14,403

Interest and Financing Costs....................................                2,410                  1,661
Other Expenses..................................................                   --                    900
                                                                            ---------              ---------
   Income before taxes..........................................                5,644                 11,842

Provision for Taxes.............................................                1,523                  3,451
                                                                            ---------              ---------
   Net Income ..................................................              $ 4,121                 $8,391
                                                                            =========              =========

   Net Income per Share - Basic.................................               $ 0.81                 $ 1.42
                                                                            =========              =========
                        - Diluted...............................               $ 0.78                 $ 1.36
                                                                            =========              =========
Weighted Average Shares Outstanding - Basic.....................            5,070,984              5,900,083
                                                                            =========              =========
                                    -Diluted....................            5,277,463              6,148,149
                                                                            =========              =========
</TABLE>
   The accompanying Notes to Consolidated Financial Statements are an integral
                part of these consolidated financial statements.

                                      -4-
<PAGE>
                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                                              THIRTEEN            THIRTEEN
                                                                             WEEKS ENDED         WEEKS ENDED
                                                                            SEPTEMBER 30,         OCTOBER 2,
                                                                                2000                 1999
                                                                             ---------             ---------
<S>                                                                            <C>                  <C>
 Net Sales......................................................               $61,047              $ 58,622
 Cost of Sales..................................................                46,705                43,856
                                                                             ---------             ---------
   Gross profit.................................................                14,342                14,766
                                                                             ---------             ---------
Operating Expenses:
      Selling, warehouse, general and
          administrative expenses...............................                11,750                 9,900
   Non-cash stock based compensation............................                   176                   500
   Depreciation and amortization expense........................                   592                   364
                                                                             ---------             ---------
       Total operating expenses.................................                12,518                10,764
   Other income.................................................                  (353)                 (382)
   Amortization of excess revalued net assets acquired
         over equity............................................                                      (1,143)
                                                                             ---------             ---------
   Total operating expenses, net................................                12,165                 9,239
                                                                             ---------             ---------
   Operating income.............................................                 2,177                 5,527
Interest and Financing Costs....................................                   867                   657
Other Expenses..................................................                    --                   366
                                                                             ---------             ---------
   Income before taxes..........................................                 1,310                 4,504

 Income tax provision...........................................                   550                 1,362
                                                                             ---------             ---------
   Net Income ..................................................                $  760                $3,142
                                                                             =========             =========


   Net Income per Share - Basic.................................              $ 0.15                  $ 0.56
                                                                             =========             =========
                        - Diluted...............................              $ 0.15                  $ 0.52
                                                                             =========             =========

Weighted Average Shares Outstanding - Basic.....................             5,073,929             5,617,973
                                                                             =========             =========
                                    - Diluted...................             5,145,417             6,008,999
                                                                             =========             =========
</TABLE>

   The accompanying Notes to Consolidated Financial Statements are an integral
                part of these consolidated financial statements.

                                      -5-
<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                                               THIRTY-NINE                THIRTY-NINE
                                                                               WEEKS ENDED                 WEEKS ENDED
                                                                               SEPTEMBER 30,               OCTOBER 2,
                                                                                   2000                       1999
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>                         <C>
   Net income .......................................................          $  4,121                    $  8,391
   Adjustments  to  reconcile  net  income  to net cash  provided  by
     operating activities:
     Amortization of excess net assets acquired over equity..........            (1,898)                     (3,429)
     Depreciation and amortization...................................             1,691                       1,057
     Provision for possible losses on accounts receivable............                (3)                         (6)
     Provision for stock based compensation and stock option grants..               643                       1,130
     Changes in assets and liabilities, net of impact of acquisitions:
       Accounts receivable...........................................           (27,222)                    (24,055)
       Inventories...................................................            10,899                       9,946
       Prepaid expenses and other current assets.....................               899                        (125)
       Deferred charges and other assets.............................            (2,261)                     (1,738)
       Accounts payable, accrued expenses and other current
           liabilities...............................................             2,721                        (27)
       Income taxes payable..........................................               662                         889
       Deferred liabilities..........................................               215                         300
     Changes due to reorganization activities:
       Use of pre-consummation deferred taxes........................               598                         839
                                                                                -------                     -------
         Total adjustments...........................................           (13,056)                    (15,219)
                                                                                -------                     -------
         Net cash provided by operating activities...................            (8,935)                     (6,828)
                                                                                -------                     -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures..............................................            (1,789)                     (1,870)
   Net cash paid for acquisition.....................................            (5,001)                        (97)
   Treasury stock repurchases........................................          -                             (7,000)
   Merger costs......................................................          -                               (775)
                                                                                -------                     -------
         Net cash used in investing activities.......................            (6,790)                     (9,742)
                                                                                -------                     -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from borrowings..........................................            87,934                      53,084
   Repayment of borrowings...........................................           (72,742)                    (40,457)
   Proceeds from notes payable.......................................          -                              5,000
   Repayment of notes payable........................................              (750)                       (626)
   Repayment of capital leases ......................................               (58)                        (35)
   Proceeds from new stock issuance and options exercised ...........                62                           -
   Interest earned on restricted cash................................               119                          93
   Payments made on confirmation liabilities under the Plan
   of Reorganization.................................................               (90)                       (398)
                                                                                -------                     -------
             Net cash provided by financing activities...............            14,475                      16,661
                                                                                -------                     -------
   Net (decrease) increase in cash and cash equivalents..............            (1,250)                         91

   Cash and cash equivalents, at beginning of period.................             5,466                       4,213
                                                                                -------                     -------
   Cash and cash equivalents, at end of period.......................            $4,216                     $ 4,304
                                                                                =======                     =======
</TABLE>
       The accompanying Notes to Consolidated Financial Statements are an
           integral part of these consolidated financial statements.

                                      -6-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

                                   (UNAUDITED)

1.       BASIS OF PRESENTATION:

         The  consolidated   financial  statements  included  herein  have  been
prepared  by The Leslie Fay  Company,  Inc.  and  subsidiaries  (The  Leslie Fay
Company,  Inc. being sometimes  individually  referred to, and together with its
subsidiaries  collectively  referred  to, as the  "Company"  as the  context may
require),  pursuant to the rules and  regulations of the Securities and Exchange
Commission (the "SEC").  Certain information and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles  have been  condensed or omitted from this report,  as is
permitted by such rules and regulations;  however, the Company believes that the
disclosures are adequate to make the information presented not misleading. These
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements  and  the  notes  thereto  included  in  the
Company's  Annual  Report on Form 10-K for the Fiscal Year ended January 1, 2000
(the "1999 Form  10-K").  Interim  taxes were  provided  based on the  Company's
estimated effective tax rate for the year.

         In the opinion of management,  the information  furnished  reflects all
adjustments, all of which are of a normal recurring nature, necessary for a fair
presentation  of the  results  for the  reported  interim  periods.  Results  of
operations for interim periods are not necessarily indicative of results for the
full year, and the seasonality of the business may make projections of full year
results based on interim periods unreasonable.

2.       ACQUISITION:

         On February 15, 2000, the Company entered into a license agreement with
the licensing subsidiary of Liz Claiborne, Inc. ("Liz Claiborne") to manufacture
dresses and suits under the Liz Claiborne and Elisabeth trademarks.  The Company
also  purchased  the dress  finished  goods and raw  materials  inventory of Liz
Claiborne and agreed to honor related  manufacturing  commitments  that had been
made by Liz  Claiborne as of February 15, 2000.  Beginning  for the Holiday 2000
season that begins to ship in October 2000,  the Company will design and arrange
the  manufacture  of Liz  Claiborne  and  Elisabeth  dresses.  Liz Claiborne and
Elisabeth  dresses are sold in department  and specialty  stores  throughout the
United States and, to a much lesser extent, in Canada, Mexico and other parts of
the world.

         The  agreements  with Liz  Claiborne  provide that the Company will pay
royalties including  guaranteed minimum average annual royalty payments of up to
approximately  $2,000,000 throughout the five year initial term of the agreement
against 6% of the net sales of Liz Claiborne  and  Elisabeth  dresses and suits.
The Company also will reimburse Liz Claiborne for certain  operating  costs on a
transitional basis.

         This transaction  generated intangible assets of $1,919,000,  which the
Company is amortizing over the initial  five-year period of the agreement ending
February 2005. The Liz Claiborne agreement has been accounted for as a purchase,
and  accordingly,  the  operating  results of Liz  Claiborne  Dresses  have been
included in the Company's  consolidated  financial  statements since the date of
the acquisition.  The purchase price allocation is preliminary and is subject to
refinement  during  fiscal  2000.  Year to  date  net  sales  from  the  date of
acquisition through September 30, 2000 were $18,720,000.

                                      -7-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


         On May 9, 2000,  the  Company  consummated  its  agreement  to purchase
substantially  all the  assets of  Cynthia  Steffe,  Inc.  Cynthia  Steffe  also
licensed  her trade  names to the  Company  for an  indefinite  period.  Cynthia
Steffe, Inc. markets to both department and specialty stores in the contemporary
and designer sportswear categories. This transaction generated intangible assets
of $1,092,000,  which the Company is amortizing over fifteen years. Year to date
net  sales  from  the  date of  acquisition  through  September  30,  2000  were
$1,591,000.  The  full  year  1999 net  sales  for  Cynthia  Steffe,  Inc.  were
approximately  $7,000,000.  Cynthia  Steffe and Richard  Roberts,  principals of
Cynthia Steffe, Inc., have entered into employment agreements with the Company.

3.       INVENTORIES:

         Inventories consist of the following:

                                         (Unaudited)
                                         September 30,        January 1,
                                             2000               2000
                                         -------------        ----------

  (In thousands)

  Raw materials                               $12,136           $14,338
  Work in process                               3,482             3,654
  Finished goods                               10,233            16,234
                                               ------            ------
    Total inventories                         $25,851            $34,226
                                              =======            =======

4.       DEBT:

         On June 2, 1997, in  preparation  for the  consummation  of the Amended
Joint Plan of  Reorganization  ("the Plan"),  a  wholly-owned  subsidiary of the
Company entered into a two-year financing agreement (the "CIT Credit Agreement")
with CIT,  which was amended on August 25, 1999 to extend the agreement  through
June 2, 2004, to provide direct borrowings and to issue letters of credit on the
Company's behalf. Direct borrowings bear interest at prime minus 0.25% (9.25% at
September  30,  2000)  and the CIT  Credit  Agreement  requires  a fee,  payable
monthly,  on average  outstanding  letters  of credit at a rate of 2%  annually.
There was  $15,192,000  in direct  borrowings  outstanding  under the CIT Credit
Agreement and approximately  $8,502,000 was committed under unexpired letters of
credit as of September 30, 2000.  On September  30, 2000,  the Company had a net
borrowing  availability  under the CIT Credit Agreement of $28,473,000 in excess
of direct  borrowings  and  amounts  committed  under the  unexpired  letters of
credit.  The peak credit line  utilization  during the  thirty-nine  weeks ended
September  30, 2000 was  $30,190,000,  which  consisted of direct  borrowings of
$22,125,000 and unexpired letters of credit of $8,065,000

         Additionally,  the  Company  borrowed,  through  a five  year term note
payable,  $5,000,000 at an interest rate of prime plus 200 basis points  (11.50%
at September 30, 2000) which was used to repurchase the Company's  common stock.
As of September 30, 2000 the principal  balance  outstanding on the note payable
was $4,250,000.

                                      -8-
<PAGE>

                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

         The CIT Credit  Agreement has been modified as of August 14, 2000.  Key
modifications since January 1, 2000 include:

|X|      The  committed  credit  line has been  increased  to  $52,000,000  from
         $42,000,000. The sub-limit on letters of credit has also been increased
         to $30,000,000 from $25,000,000.

|X|      The requirement  that in order to pay dividends or to repurchase  stock
         there remain unused  credit  available of no less than  $5,000,000  has
         been eliminated.

|X|      The covenant related to the maximum capital  expenditures was raised to
         $4,000,000  for the year ended December 30, 2000 and $2,500,000 for the
         fiscal years thereafter.

|X|      The  Company is  permitted  to grant  stock  acquisition  loans to four
         designated senior officers in the amount of approximately $3,645,000 to
         fund the acquisition of shares of capital stock of the Company.

[ ]      The Company is authorized  to make a loan to the  principals of Cynthia
         Steffe,  Inc. not to exceed  $1,000,000 with principal and interest due
         May 10, 2010. The loan balance on September 30, 2000 was $877,000.

|X|      Letters of credit may be issued in support of product  which  bears the
         Liz Claiborne  licensed mark for up to 180 days to an aggregate maximum
         amount not to exceed $5,000,000.

         As collateral for borrowing under the CIT Credit Agreement, the Company
has granted to CIT a security  interest in substantially  all of its assets.  In
addition,  the CIT Credit  Agreement  contains  certain  restrictive  covenants,
including  limitations on the incurrence of additional  liens and  indebtedness.
The Company is currently in compliance with or has obtained  written waivers for
all requirements contained in the CIT Credit Agreement.

5.       INCOME TAXES:

         The provision  for federal,  state and local income taxes is $1,523,000
and $3,451,000 for the thirty-nine weeks ended September 30, 2000 and October 2,
1999,  respectively  and $550,000 and  $1,362,000  for the thirteen  weeks ended
September  30, 2000 and October 2, 1999.  Cash  federal and state  income  taxes
payable  are  partially  offset  by  the  utilization  of  pre-consummation  net
operating loss carryforwards.  The utilization of pre-consummation net operating
loss  carryforwards  for federal income tax purposes is limited to approximately
$1,500,000 in 2000.

6.       ACCOUNTING FOR STOCK OPTION COMPENSATION:

         Under the  provisions  of Statement of Financial  Accounting  Standards
("SFAS")  No.123,  "Accounting  for Stock Based  Compensation,"  the Company has
recorded  $614,000 and $1,010,000 of non-cash stock based  compensation  expense
for the  thirty-nine  weeks  ended  September  30,  2000 and  October  2,  1999,
respectively  and $147,000 and $417,000 for the thirteen  weeks ended  September
30,  2000 and  October 2,  1999,  respectively.  These  amounts  were  offset as
adjustments  to  Capital  in  excess of par  value in the  Consolidated  Balance
Sheets.

                                      -9-
<PAGE>

                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

7.       NET INCOME PER SHARE:

         For the thirty-nine weeks ended September 30, 2000 and October 2, 1999,
the basic weighted average common shares outstanding was 5,070,984 and 5,900,083
respectively,  and the weighted average shares outstanding assuming dilution was
5,277,463  and  6,148,149  respectively.  The  difference of 206,479 and 248,066
respectively,  represents  the  incremental  dilution of shares upon exercise of
dilutive stock options.

8.       SUBSEQUENT EVENT:

         On November 14, 2000, the Company signed a definitive agreement to sell
the "HUE" trademark to the Kayser-Roth  Corporation,  the principal  licensee of
such trademarks.

                                      -10-
<PAGE>


ITEM 2.   MANAGEMENT'S  DISCUSSION AND ANALYSIS OF
-------   ----------------------------------------
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
            ----------------------------------------------

(A)  RESULTS OF  OPERATIONS

THIRTY-NINE WEEKS ENDED SEPTEMBER 30, 2000 AS COMPARED TO
THIRTY-NINE WEEKS ENDED OCTOBER 2, 1999

         The Company  recorded  net sales of  $173,281,000  for the  thirty-nine
weeks ended September 30, 2000,  compared with  $158,216,000 for the thirty-nine
weeks ended October 2, 1999, a net increase of  $15,065,000  or 9.5%.  The Dress
product  lines' net  sales,  excluding  $18,720,000  generated  by the  recently
licensed Liz Claiborne dress brands, increased $1,217,000 or 1.1% as a result of
a 3.3%  decrease  in the Leslie Fay dress  brands  combined  with an increase of
11.1%  in the  Warren  brands.  Net  sales  for the  Sportswear  product  lines,
excluding   $1,591,000   generated  by  the  recently  acquired  Cynthia  Steffe
sportswear  brands,  decreased by  $6,462,000 or 14.5% mostly as a result of the
restructuring  of the  Leslie  Fay  Sportswear  brands.  This  restructuring  is
expected to reduce sales and improve profitability.

         Gross  profit  was  $39,563,000  and 22.8% of net sales  compared  with
$41,293,000  and 26.1% for the  thirty-nine  weeks ended  September 30, 2000 and
October 2, 1999, respectively.  The gross profit from the Dress lines, excluding
$3,263,000  generated  by the  recently  licensed Liz  Claiborne  dress  brands,
declined  $5,953,000  and the  percentage  of net sales  decreased to 22.6% from
28.1%.  The gross  profit  generated  by the  Leslie  Fay Dress  lines  declined
$2,512,000  and  23.7% of net  sales  compared  to 26.1%  of net  sales  for the
comparable  period ended October 2, 1999. The decline in gross profit was due to
both increased  allowances and  markdowns.  The gross profit  contributed by the
Warren brands  declined  $3,441,000 and the percentage of net sales decreased to
20.5% from 32.7% for the comparable period ended October 2, 1999. The decline in
gross  profit was due to both  increased  allowances  and  markdowns,  which was
generated  by an increase in off price sales.  The gross profit  produced by the
Sportswear lines,  excluding $262,000 generated by the recently acquired Cynthia
Steffe  sportswear  brands,  for the thirty-nine weeks ended September 30, 2000,
increased by $802,000 and the  percentage  of net sales  increased to 26.7% from
21.0% for the comparable period ended October 2, 1999. The improved gross profit
as a percentage of net sales resulted from the  restructuring  of the Leslie Fay
Sportswear brand that was implemented in the fourth quarter of 1999.

         Selling,   warehouse,   general  and   administrative   expenses   were
$32,243,000 or 18.6% of net sales and  $29,284,000 or 18.5% of net sales for the
thirty-nine  weeks ended  September 30, 2000 and October 2, 1999,  respectively.
The expense increase of $2,959,000 was caused mainly by $2,928,000 of additional
operating  expenses  related to the Liz  Claiborne  dress brands and the Cynthia
Steffe brands partially  offset by  approximately  $1,510,000 of expense savings
caused by the restructuring of the Leslie Fay sportswear  brands.  Additionally,
there was a one-time charge of $1,500,000  relative to the  stockholder-approved
contract for a member of senior management.

         Non-cash  stock  based  compensation  for  stock  options  and  outside
director  compensation  for the  thirty-nine  weeks ended September 30, 2000 and
October 2, 1999 was  $643,000  and  $1,130,000,  respectively.  The prior year's
expense included a one-time only expense relating to the early vesting of middle
management stock options as a result of the merger transaction with a subsidiary
of Three Cities Research, Inc.

                                      -11-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

         Other income,  consisting  primarily of royalty income,  was $1,045,000
and $1,054,000 for the thirty-nine weeks ended September 30, 2000 and October 2,
1999,  respectively.  Upon consummation of the transaction referred to in Note 8
of  the  Notes  to  the  Consolidated  Financial  Statements,  there  will  be a
substantial decline in future royalty income.

         Depreciation and amortization  expense for the thirty-nine  weeks ended
September  30,  2000 and  October  2, 1999,  respectively,  was  $1,566,000  and
$959,000.  The  increase  was due to the  acquisition  of fixed assets since the
Company's  June 4,  1997  emergence  from  bankruptcy  as well as the  excess of
purchase  price over net assets  acquired from The Warren Apparel Group Ltd. and
Cynthia Steffe, Inc. as well as the licensing of the Liz Claiborne dress brands.
Depreciation and amortization  expense for the thirty-nine weeks ended September
30, 2000 for the newly acquired businesses included $324,000 and $43,000 for the
Liz Claiborne  license  agreement and the Cynthia Steffe  brands,  respectively.
During the thirty-nine week period $240,000 of additional  depreciation  expense
was incurred to support technology efforts. In addition,  the Company recognized
income of $1,898,000 and $3,429,000 for the  thirty-nine  weeks ended  September
30, 2000 and October 2, 1999, respectively, from amortization of excess revalued
net assets  acquired  over equity  under fresh  start  reporting.  The excess of
revalued  net assets was fully  amortized in the second  quarter of 2000,  which
will negatively impact future earnings per share compared to prior periods.

         Interest and financing  costs were  $2,410,000  and  $1,661,000 for the
thirty-nine  weeks ended  September 30, 2000 and October 2, 1999,  respectively.
Included in the  interest  and  financing  cost was $387,000 and $52,000 for the
interest on the  $5,000,000  term note  entered  into on August 25, 1999 for the
period  ended  September  30,  2000  and  October  2,  1999,  respectively.  The
additional  interest  was  generated  as a result of rising  interest  rates and
higher  borrowings  during the thirty-nine weeks ended September 30, 2000, which
were  utilized  for the Liz  Claiborne  and  Cynthia  Steffe  transactions.  The
financing  fees  under the new CIT Credit  Agreement  were  partially  offset by
income earned on the cash invested for the thirty-nine weeks ended September 30,
2000 and October 2, 1999.

         Other expenses of $900,000 were recorded during the  thirty-nine  weeks
ended  October 2, 1999 to provide for  non-operating  legal and  financing  fees
incurred as a result of the merger transaction with Three Cities Research, Inc.

         The provision for federal,  state and local income taxes was $1,523,000
and $3,451,000 for the thirty-nine weeks ended September 30, 2000 and October 2,
1999, respectively.

THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AS COMPARED TO
THIRTEEN WEEKS ENDED OCTOBER 2, 1999

         The Company  recorded net sales of  $61,047,000  for the thirteen weeks
ended September 30, 2000, compared with $58,622,000 for the thirteen weeks ended
October 2, 1999, a net increase of $2,425,000 or 4.1%.  The Dress product lines'
net sales, excluding $5,655,000 generated by the recently licensed Liz Claiborne
dress  brands,  decreased  $2,110,000 or 5.6%. A 1.6% increase in the Leslie Fay
dress brands was offset by a 17.0% decrease in the Warren brands.  The decreased
volume of the  Warren  Group was  driven by sales  reductions  in both the David
Warren and Reggio labels. Net sales for the Sportswear product lines,  excluding
$1,509,000  generated by the recently acquired Cynthia Steffe sportswear brands,
decreased by $2,629,000 or 12.5%.  This resulted from the  restructuring  of the
Leslie  Fay  Sportswear  brand and the Leslie  Fay  Haberdashery  brand that was
implemented in the fourth  quarter of 1999.  This  restructuring  is expected to
reduce sales and improve gross profit.

                                      -12-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

         Gross  profit  was  $14,342,000  and 23.5% of net sales  compared  with
$14,766,000  and 25.2% for the  thirteen  weeks  ended  September  30,  2000 and
October 2, 1999, respectively.  The gross profit from the Dress lines, excluding
$696,000  generated  by  the  recently  licensed  Liz  Claiborne  dress  brands,
decreased  $2,231,000 and the percent to net sales decreased to 22.9% from 27.5%
for the  comparable  period  ended  October 2,  1999.  The Leslie Fay dress line
experienced an improvement in gross profit contribution of $340,000 and 24.6% of
net sales  compared  with  23.5% of net sales for the third  quarter of 2000 and
1999,  respectively.  The Warren Group  experienced a decline in gross profit of
$2,571,000  and 19.5% of net sales in the third quarter of 2000 when compared to
33.8% of net sales in the third  quarter of 1999.  The high  level of  off-price
sales was the primary  cause of this gross profit  decline for the Warren Group.
The gross profit produced by the Sportswear lines,  excluding $293,000 generated
by the recently  acquired  Cynthia Steffe  sportswear  brands,  for the thirteen
weeks ended  September  30, 2000  increased  by $922,000  and the percent to net
sales  increased to 29.1% from 21.0% for the comparable  period ended October 2,
1999.

         Selling,   warehouse,   general  and   administrative   expenses   were
$11,750,000 and 19.2% of net sales and $9,900,000 and 16.9% of net sales for the
thirteen weeks ended September 30, 2000 and October 2, 1999,  respectively.  The
expense  increase  of  $1,850,000  was  caused  mainly  by about  $1,148,000  of
additional  operating expenses related to the Liz Claiborne dress brands and the
Cynthia  Steffe brands  partially  offset by expense  savings  $301,000 from the
restructuring  of the Leslie Fay sportswear  brands.  Additionally,  there was a
one-time charge of $1,500,000 relative to the stockholder-approved  contract for
a member of senior management.

         Non-cash  stock  based  compensation  for  stock  options  and  outside
director  compensation  for the  thirteen  weeks  ended  September  30, 2000 and
October  2, 1999 was  $176,000  and  $500,000,  respectively.  The prior  year's
expense included a one-time only expense relating to the early vesting of middle
management stock options as a result of the merger transaction with a subsidiary
of Three Cities Research, Inc.

         Other income,  consisting primarily of royalty income, was $353,000 and
$382,000 for the thirteen  weeks ended  September  30, 2000 and October 2, 1999,
respectively.  Upon consummation of the transaction referred to in Note 8 of the
Notes to Consolidated Financial Statements,  there will be a substantial decline
in future royalty income

         Depreciation  and  amortization  expense for the  thirteen  weeks ended
September 30, 2000 and October 2, 1999, was $592,000 and $364,000, respectively.
The increase was due to the acquisition of fixed assets since the Company's June
4, 1997 emergence from bankruptcy. Depreciation and amortization expense for the
thirteen  weeks  ended  September  30,  2000 for the newly  acquired  businesses
included  $144,000 and $9,000 for the Liz  Claiborne  license  agreement and the
Cynthia Steffe brands, respectively.  During the thirteen week period $75,000 of
additional  depreciation  expense was incurred to support technology efforts. In
addition,  the Company  recognized  income of $1,143,000  for the thirteen weeks
ended October 2, 1999, from  amortization of excess revalued net assets acquired
over equity under fresh start  reporting.  The excess of revalued net assets was
fully  amortized in the second  quarter of 2000,  which will  negatively  impact
future earnings per share compared to prior periods.

                                      -13-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

         Interest  and  financing  costs  were  $867,000  and  $657,000  for the
thirteen  weeks ended  September  30,  2000 and  October 2, 1999,  respectively.
Included in the  interest  and  financing  cost was $127,000 and $52,000 for the
interest on the  $5,000,000  term note  entered  into on August 25, 1999 for the
period ended September 30, 2000 and October 2, 1999 respectively. The additional
interest  was  generated  as a result of higher  borrowings  during the thirteen
weeks  ended  September  30,  2000,  which were  invested  in  building  the Liz
Claiborne dress and Cynthia Steffe brands' working  capital.  The financing fees
under the new CIT Credit Agreement were partially offset by income earned on the
cash  invested for the thirteen  weeks ended  September  30, 2000 and October 2,
1999.

         Other  expenses of $366,000  were  recorded  during the thirteen  weeks
ended  October 2, 1999 to provide  for  non-operating  legal fees  incurred as a
result of the Three Cities merger transaction.

          The provision  for federal,  state and local income taxes was $550,000
and $1,362,000  for the thirteen  weeks ended  September 30, 2000 and October 2,
1999, respectively.

(B) LIQUIDITY AND CAPITAL RESOURCES

          The sixth  amendment  of the CIT Credit  Agreement  provides a working
capital facility commitment of $52,000,000,  including a $30,000,000 sublimit on
letters  of  credit.  As  of  September  30,  2000  the  Company  was  utilizing
approximately  $8,502,000  under the CIT Credit Agreement for letters of credit,
and there was $15,192,000 in outstanding cash borrowings. On September 30, 2000,
the Company had a net borrowing  availability  under the CIT Credit Agreement of
$28,473,000  in excess of direct  borrowings  and  amounts  committed  under the
unexpired  letters  of  credit.  The peak  credit  line  utilization  during the
thirty-nine  weeks ended September 30, 2000 was $30,190,000,  which consisted of
direct borrowings of $22,125,000 and unexpired letters of credit of $8,065,000.

         At September 30, 2000, the Company's cash and cash equivalents amounted
to $4,216,000,  of which $3,461,000 is restricted to the payment of confirmation
liabilities relative to the Company's 1997 exit from bankruptcy. Working capital
decreased $2,517,000 to $34,782,000 during the thirty-nine weeks ended September
30, 2000. The changes in the  components of working  capital were: a decrease in
cash and cash equivalents of $1,250,000;  an increase in net accounts receivable
of $27,715,000;  a decrease in inventories of $8,375,000;  a decrease in prepaid
expenses and other current  assets of $892,000 and an increase of $19,715,000 in
total current  liabilities.  The changes in working capital are primarily due to
the  seasonality of the business.  The over all decrease in working  capital was
$2,517,000,  which was driven  primarily  by the dress  lines.  A  reduction  of
$5,470,000 from the Sportswear  Division was fully offset by the working capital
requirements  of  the  newly  acquired  businesses.  Total  current  liabilities
increased as a result of additional  short term  borrowings of  $15,192,000  and
increased operating accounts payable and other accrued liabilities of $4,523,000
resulting mostly from the timing of liabilities due.

         Although the Company's  results of  operations  indicated net income of
$4,121,000 for the thirty-nine weeks ended September 30, 2000, these results are
not indicative of results for an entire year.

         Capital  expenditures  were $1,789,000 for the thirty-nine  weeks ended
September  30, 2000,  which  included  $205,000 of equipment  purchased  under a
capital  lease.  Capital  expenditures  are expected to be $2,200,000 for fiscal
year 2000. The anticipated  capital  expenditures  for the remainder of the year
are  primarily  related  to  improvements  in  management  information  systems,
improvements in the  distribution  facility,  as well as the Liz Claiborne Dress
showrooms and office space. The Company believes that its financing arrangements
and  anticipated  level of  internally  generated  funds will be  sufficient  to
finance its capital spending during the remainder of 2000.

                                      -14-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

         The Company may pay cash  dividends or  repurchase  its stock under the
CIT Credit Agreement as long as those  disbursements do not cause the Company to
be in violation of the restrictive covenants and the cumulative stock repurchase
or distribution  of dividends does not exceed the dividend and stock  repurchase
basket.  At the end of the fiscal  quarter ended  September 30, 2000 the Company
may borrow up to $6,041,000 for stock repurchase or dividend  distribution.  The
Company has no plans to pay cash dividends in the foreseeable future.

         The Company did not  experience any  significant  year 2000 problems or
disruptions  in the  business  process  caused  by its own  systems  or those of
unrelated third parties.  The financial condition or results of operations since
the  fiscal  year  ended  January  1,  2000 were not  affected  by any year 2000
problems.  There was no material  difference between the actual cost to make the
Company's   operations  year  2000  compliant  and  that  which  was  previously
disclosed.  Additionally,  there  are no  remaining  contingencies  or  reserves
relative to year 2000.

         There were no significant  changes in the Company's  inventory level or
cash flow caused by attempts to mitigate the risk of year 2000 related  business
interruptions.  The revenue  patterns of the  Company  were not  affected by any
unusual  customer buying levels,  either  positively or negatively at the end of
fiscal 1999.

         There were no  significant  information  technology  projects that were
deferred in fiscal 1999 that will require "catch-up" in the year 2000.

         The Company also passed  through the critical date of February 29, 2000
with no  significant  issues.  The Company  will  continue to monitor  year 2000
issues and will update disclosures appropriately.

         Certain  statements  contained  in this Form 10-Q,  including,  without
limitation,   statements   containing  the  words   "believes,"   "anticipates,"
"expects," and words of similar import, constitute  "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the  Company or  industry  results to be  materially  different  from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking  statements.  Such factors include, among others, the following:
the effects of future events on the Company's  financial  performance;  the risk
that the Company may not be able to finance its planned growth; risks related to
the industry in which the Company competes,  including  potential adverse impact
of external factors such as inflation,  consumer confidence,  unemployment rates
and  consumer  tastes and  preferences;  and the risk of  potential  increase in
market interest rates from current rates. Given these uncertainties, current and
prospective  investors  are  cautioned  not to  place  undue  reliance  on  such
forward-looking  statements.  The Company disclaims any obligation to update any
such factors or to publicly  announce the result of any  revisions to any of the
forward-looking   statements  contained  herein  to  reflect  future  events  or
developments.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

           None.

                                      -15-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

PART II  -  OTHER INFORMATION
-------     -----------------

ITEM 1.    LEGAL PROCEEDINGS.
-------    ------------------

         No other legal  proceedings were terminated during the third quarter of
2000 or thereafter,  other than ordinary  routine  litigation  incidental to the
business of the Company.

ITEM 2.    CHANGES IN SECURITIES.
-------    ----------------------

                  None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.
-------    --------------------------------

                  None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
-------  ----------------------------------------------------

(a)      Date of Annual Meeting of Stockholders - September 21, 2000

(b)      Directors  Elected at the Annual Meeting - John J.  Pomerantz,  John A.
         Ward,  Robert L. Sind,  Bernard Olsoff, H. Whitney Wagner and Thomas G.
         Weld.

(c)      The election of six directors:

                                                   STOCKHOLDER VOTES
                                                   -----------------

                                            FOR                        WITHHELD
                                            ---                        --------

         John J. Pomerantz                  3,438,784                  19,251
         John A. Ward                       3,438,784                  19,251
         Robert L. Sind                     3,438,784                  19,251
         Bernard Olsoff                     3,438,784                  19,251
         H. Whitney Wagner                  3,438,784                  19,251
         Thomas G. Weld                     3,438,784                  19,251

                                      -16-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


         Approval of certain provisions of employment arrangements to be entered
into by the Company and the following individuals:
<TABLE>
<CAPTION>
                                                              STOCKHOLDER VOTES
                                                              -----------------
                                                                                                     BROKER
                                         FOR                   AGAINST            ABSTENTIONS        NON-VOTES
                                         ----                  -------            ------------       ---------
<S>                                      <C>                   <C>                <C>                     <C>
         John J. Pomerantz               3,463,036             9,306              656                     0
         John A. Ward                    3,468,859             3,483              656                     0
         Dominick Felicetti              3,469,529             2,813              656                     0
         Warren T. Wishart               3,469,529             2,813              656                     0
</TABLE>

         Ratification  of the  appointment  by the Board of  Directors of Arthur
         Andersen LLP as the Company's  independent  accountants  for the fiscal
         year ending December 30, 2000:

         STOCKHOLDER VOTES
         -----------------

         For:                 3,471,900
         Against:                 1,010
         Abstentions:                88
         Broker non-votes:            0

ITEM 5.    OTHER INFORMATION.
-------    ------------------

                  None.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.
-------    ---------------------------------

         a)       Exhibits  Exhibits are set forth on the "Index to Exhibits" on
                  page E-1 hereof.

         8        Reports on Form 8-K None


                                      -17-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES



                                   SIGNATURES

                  Pursuant to the requirements of the Securities Exchange Act of
1934,  the Company has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  November 14, 2000            THE LESLIE FAY COMPANY, INC.
                                    (Company)

                                    By:  /s/ Warren T. Wishart
                                       --------------------------------------
                                             Warren T. Wishart
                                    Senior Vice President - Administration
                                    and Finance, Chief Financial Officer
                                    and Treasurer

                                      -18-
<PAGE>
                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


                                INDEX TO EXHIBITS

Exhibit No.       Description
-----------       -----------

27                Financial Data Schedule.



                                      E-1