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 APRIL 1, 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 5,073,138 shares of Common Stock outstanding at April 1, 2000.


<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>

                                      INDEX
                                                                                                             Page No.
                                                                                                             --------

PART I  - FINANCIAL INFORMATION
<S>                   <C>                                                                                        <C>
Item 1.  Financial Statements:

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


                  Consolidated Statements of Operations (Unaudited) for the
                     Thirteen weeks Ended April 1, 2000 and
                     April 3, 1999, respectively..................................................................4

                  Consolidated Statements of Cash Flows (Unaudited) for the
                     Thirteen Weeks Ended April 1, 2000 and
                     April 3, 1999, respectively..................................................................5


Notes to Consolidated Financial Statements........................................................................6

Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations............................................................12

Item 3.  Quantitative and Qualitative Disclosures

                  About Market Risk..............................................................................14

PART II  -  OTHER INFORMATION

Item 1.  Legal Proceedings.......................................................................................15
Item 2.  Changes in Securities...................................................................................15
Item 3.  Defaults Upon Senior Securities.........................................................................15
Item 4.  Submission of Matters to a Vote of Security Holders.....................................................15
Item 5.  Other Information.......................................................................................15
Item 6.  Exhibits and Reports on Form 8-K........................................................................15

SIGNATURES.......................................................................................................16

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

                                                                                APRIL 1,              JANUARY 1,
                                ASSETS                                            2000                   2000
Current Assets:
<S>                                                                                  <C>                    <C>
    Cash and cash equivalents.......................................                 $   867                $ 2,034
    Restricted cash and cash equivalents............................                   3,446                  3,432
    Accounts receivable- net of allowances for possible losses of
       $6,775 and $5,468, respectively..............................                  44,357                 16,952
    Inventories.....................................................                  28,611                 34,226
    Prepaid expenses and other current assets.......................                   1,440                  2,702
                                                                           -----------------      -----------------
       Total Current Assets.........................................                  78,721                 59,346
    Property, plant and equipment, at cost, net of accumulated
       depreciation of $1,904 and $1,535, respectively..............                   3,564                  3,695
    Excess of purchase price over net assets acquired-net of
       accumulated amortization of $467 and $357, respectively......                   6,138                  4,330
    Deferred charges and other assets...............................                   2,065                  1,629
                                                                           -----------------      -----------------
    Total Assets....................................................                $ 90,488               $ 69,000
                                                                           =================      =================

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Short term debt.................................................               $  13,001                $ 1,000
    Accounts payable................................................                  15,837                  9,454
    Accrued expenses and other current liabilities..................                   7,946                  8,121
    Accrued expenses and other current confirmation liabilities.....                   3,447                  3,432
    Income taxes payable............................................                     181                     --
    Current portion of capitalized leases...........................                      27                     40
                                                                           -----------------      -----------------
       Total Current Liabilities....................................                  40,439                 22,047

    Long term note payable..........................................                   3,750                  4,000
    Excess of revalued net assets acquired over equity under fresh - start
         reporting, net of accumulated amortization of $12,954
       and $11,811, respectively....................................                     754                  1,897
    Other long term liabilities.....................................                     994                    915
                                                                           -----------------      -----------------
    Total Liabilities...............................................                  45,937                 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;
      6,890 and 6,870 shares issued, respectively....................                     69                     69
Capital in excess of par value.......................................                 32,320                 31,212
 Retained earnings..................................................                  23,785                 20,483
                                                                           -----------------      -----------------
    Subtotal........................................................                  56,174                 51,764
Treasury stock, at cost; 1,817 shares                                                 11,623                 11,623
                                                                           -----------------      -----------------
    Total Stockholders' Equity......................................                  44,551                 40,141
 Total Liabilities and Stockholders' Equity.........................                $ 90,488               $ 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>

                                                                          THIRTEEN                THIRTEEN
                                                                        WEEKS ENDED             WEEKS ENDED
                                                                          APRIL 1,                APRIL 3,
                                                                            2000                    1999
                                                                      ---------------        ---------------

<S>                                                                           <C>                  <C>
Net Sales.......................................................              $66,936              $ 61,144
 Cost of Sales..................................................               51,296                44,460
                                                                      ---------------        ---------------
   Gross profit.................................................               15,640                16,684
                                                                      ---------------        ---------------
Operating Expenses:
      Selling, warehouse, general and
          administrative expenses...............................               10,604                10,373
   Non-cash stock based compensation............................                  250                   301
   Depreciation and amortization expense........................                  440                   280
                                                                      ---------------        ---------------
       Total operating expenses.................................               11,294                10,954
   Other income.................................................                (346)                 (349)

   Amortization of excess revalued net assets acquired
         over equity............................................              (1,143)                (1,143)
                                                                      ---------------        ---------------
   Total operating expenses, net................................                9,805                 9,462
                                                                      ---------------        ---------------
                                                                                5,835                 7,222
   Operating income.............................................
Interest and Financing Costs....................................                  862                   669
                                                                      ---------------        ---------------
   Income before taxes..........................................                4,973                 6,553

Provision for Taxes.............................................                1,671                 2,272
                                                                      ---------------        ---------------

   Net Income ..................................................              $ 3,302                $4,281
                                                                      ===============        ===============

   Net Income per Share - Basic.................................                $ .65                $ 0.71
                                                                      ===============        ===============
                        - Diluted...............................                $ .60                $ 0.70
                                                                      ===============        ===============
Weighted Average Shares Outstanding - Basic.....................            5,065,885             6,041,138
                                                                      ===============        ===============
                                     -Diluted...................            5,497,009             6,144,820
                                                                      ===============        ===============
</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 CASH FLOWS
                                 (IN THOUSANDS)
                                    UNAUDITED
<TABLE>
<CAPTION>
                                                                                   THIRTEEN                   THIRTEEN
                                                                                  WEEKS ENDED                WEEKS ENDED
                                                                                    APRIL 1,                   APRIL 3,
                                                                                     2000                       1999
                                                                              ----------------             ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                               <C>                          <C>
   Net income .......................................................             $ 3,302                      $4,281
   Adjustments to reconcile net income to net cash used in operating activities:
     Depreciation and amortization...................................                 479                         307
     Amortization of excess net assets acquired over equity..........              (1,143)                     (1,143)
     Provision for possible losses on accounts receivable............                  (2)                         (4)
     Provision for stock based compensation and stock option grants..                 250                         301
     Changes in assets and liabilities:
       Accounts receivable...........................................             (27,403)                    (17,289)
       Inventories...................................................               8,035                      10,744
       Prepaid expenses and other current assets.....................               1,262                          (9)
       Deferred charges and other assets.............................                (436)                          4
       Accounts payable, accrued expenses and other current
           liabilities...............................................               4,976                      (3,750)
       Income taxes payable..........................................                 181                       1,806
       Deferred liabilities..........................................                  85                         113
     Changes due to reorganization activities:
       Use of pre-consummation deferred taxes........................                 795                         130
                                                                         ----------------             ---------------
         Total adjustments...........................................             (12,921)                     (8,790)
                                                                         ----------------             ---------------
         Net cash used in operating activities.......................              (9,619)                     (4,509)
                                                                         ----------------             ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures..............................................                (238)                       (868)
   Net cash paid for acquisition.....................................              (3,104)                         --
                                                                         ----------------             ---------------
         Net cash used in investing activities.......................              (3,342)                       (868)
                                                                         ----------------             ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from borrowings..........................................              31,464                       5,105
   Repayment of  borrowings .........................................             (19,463)                         --
   Repayment of notes payable........................................                (250)                         --
   Repayment of capital leases ......................................                 (19)                        (12)
   Proceeds from new stock issuance and options exercised ...........                  62                          --
   Proceeds from (Payment of) obligations under Plan of Reorganization                 14                        (181)
                                                                         ----------------             ---------------
             Net cash provided by financing activities...............              11,808                       4,912
                                                                         ----------------             ---------------
   Net decrease in cash and cash equivalents.........................              (1,153)                       (465)
   Cash and cash equivalents, at beginning of period.................               5,466                       4,213
                                                                         ----------------             ---------------

   Cash and cash equivalents, at end of period.......................              $4,313                     $ 3,748
                                                                         ================             ===============
</TABLE>
                                      -5-

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

                 THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (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 Fall 2000
season that begins to ship in June 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.


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


         This transaction generated Goodwill of $1,887,000, 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. Net Sales for the partial quarter ending April 1,
2000, were $6,154,000.

3.       INVENTORIES:

         Inventories consist of the following:
                                              (Unaudited)
                                                April 1,       January 1,
                                                 2000            2000
                                               -------          -------
  (In thousands)
  Raw materials                                $12,823          $14,338
  Work in process                                2,858            3,654
  Finished goods                                12,930           16,234
                                               -------          -------
     Total inventories                         $28,611          $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 .25% (8.75% at
April 1, 2000) and the CIT Credit Agreement requires a fee, payable monthly,  on
average outstanding letters of credit at a rate of 2% annually.  The Company had
a net borrowing  availability  under the CIT Credit  Agreement of $16,722,000 on
April 1, 2000 and peak  borrowing  during the thirteen weeks ended April 1, 2000
was $19,424,000.  There were $12,001,000 in direct borrowings  outstanding under
the CIT Credit  Agreement and  approximately  $13,277,000  was  committed  under
unexpired  letters  of credit as of April 1,  2000.  Additionally,  the  Company
borrowed, through a five year term note payable,  $5,000,000 at an interest rate
of prime  plus 200 basis  points  (11.00%  at April 1,  2000)  which was used to
repurchase the Company's common stock.

         The CIT Credit Agreement has been modified five times through August
25, 1999, to adjust for changes relating to the Company's consolidated balance
sheet as it exited from bankruptcy, reflecting associated "fresh start"
accounting adjustments, increasing the level of capital expenditures to support
the Company's growth and Year 2000 requirements, allowing the acquisition of
certain assets of The Warren Apparel Group Ltd., permitting the Company's stock
buy-back program, extending the CIT Credit Agreement, increasing the Company's
credit line, reducing borrowing costs, and allowing the early termination of the
CIT Credit Agreement at the option of the Company. Key modifications include:


                                      -7-


<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

| |      The  committed  credit  line has been  increased  to  $42,000,000  from
         $30,000,000. The sub-limit on letters of credit has also been increased
         from   $20,000,000  to  $25,000,000.   The  limit  on  inventory  based
         collateral has been raised from  $12,000,000  to  $20,000,000  and will
         increase by $1,000,000 automatically each fiscal year.

| |      The interest rate on direct borrowings has been reduced from prime plus
         100 basis points to prime less 25 basis points.

| |      The Company may pay dividends or repurchase stock as long as the amount
         paid after August 25, 1999 does not exceed,  in the aggregate,  the sum
         of $2,000,000 plus one half of the net income exceeding $1,000,000 on a
         cumulative  basis for the period  commencing  with the  fiscal  quarter
         ending April 1, 2000 and ending with the fiscal  quarter  preceding the
         date  of  the  proposed   dividend  or  stock   repurchase.   Borrowing
         availability  before and after the making of any such dividend  payment
         or stock repurchase can not be less than $5,000,000.

| |      The  Company  issued a  five-year  term note  payable  in the amount of
         $5,000,000 at an interest rate of prime plus 200 basis points.

| |      Covenants   related  to   capital   expenditures,   minimum   ratio  of
         consolidated   current  assets  to  consolidated  current  liabilities,
         minimum  consolidated  tangible  net  worth  and  minimum  consolidated
         working capital have been set at levels appropriate for normal business
         conditions and the Company's existing stock repurchase program.

| |      The Company may, with CIT's approval, acquire new businesses.

| |      The Company may terminate the CIT Credit Agreement early.

| |      To  support  the  working  capital  requirements  of the Liz  Claiborne
         license,  the Company is  negotiating  an increase to the CIT Credit
         Agreement.

         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 $1,671,000
and  $2,272,000  for the  thirteen  weeks ended April 1, 2000 and April 3, 1999,
respectively.  Federal  and  state  income  taxes  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.

                                      -8-
<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

6.       COMMITMENTS AND CONTINGENCIES:

         As noted in the  Company's  1999 Form 10-K,  the Company and several of
its subsidiaries filed voluntary petitions in the Bankruptcy Court under Chapter
11 of the  Bankruptcy  Code in April  1993.  By order  dated April 21, 1997 (the
"Confirmation  Order"),  the Bankruptcy  Court  confirmed the Plan. The Plan was
consummated  on June 4, 1997.  Certain  alleged  creditors  who asserted age and
other  discrimination  claims against the Company and whose claims were expunged
(the  "Claimants")  pursuant  to an order of the  Bankruptcy  Court (see  below)
appealed the  Confirmation  Order to the United  States  District  Court for the
Southern  District of New York. The Company moved to dismiss the appeal from the
Confirmation  Order and the motion was granted and the appeal was dismissed.  An
appeal to the United  States  Court of Appeals for the Second  Circuit  from the
order  dismissing the appeal taken by the Claimants  subsequently was withdrawn,
without  prejudice,  to the right to  refile in the  future.  In  addition,  the
Claimants and two other persons commenced a separate adversary proceeding in the
Bankruptcy  Court to revoke the  Confirmation  Order.  The  Company has moved to
dismiss  the  adversary  proceeding  to revoke the  Confirmation  Order and that
motion has been fully  briefed,  but has not yet been  argued to the  Bankruptcy
Court.  However,  both that  matter and the right to refile the appeal  from the
order  dismissing the Claimants'  appeal are now moot based upon the proceedings
described in the next paragraph and the Claimants' lack of standing.

         The  Claimants,  who are former  employees  of the Company and who were
discharged  prior to the filing of the Chapter 11 cases,  asserted age and other
discrimination  claims,  including punitive damage claims against the Company in
the approximate  aggregate sum of $80 million.  Following a trial on the merits,
the Bankruptcy Court expunged and dismissed those claims in their entirety.  The
Claimants  appealed that decision to the United  States  District  Court for the
Southern  District of New York and, on July 17,  1998,  that Court  affirmed the
decision of the  Bankruptcy  Court.  The Claimants  took a further appeal to the
United  States  Court of Appeals  for the Second  Circuit,  which  affirmed  the
decision of the United States  District  Court in a summary order dated June 28,
1999.  On September  27, 1999,  the  Claimants  filed a petition for  certiorari
review  by the  United  States  Supreme  Court  for  relief.  The  petition  for
certiorari was denied on January 10, 2000.

         Five of the Claimants in the above-described appeal commenced an action
alleging employment discrimination against certain former officers and directors
of the Company in the United States District Court for the Southern  District of
New York. The Court  dismissed all of the causes of action arising under federal
and state  statutes,  and the only remaining  claims are those arising under the
New York City Human Rights Law.  Discovery is complete and it is expected that a
summary  judgement motion will be filed by the defending  officers and directors
in the near future.

         In February 1993, the  Securities and Exchange  Commission  obtained an
order directing a private investigation of the Company in connection with, among
other  things,  the filing by the Company of annual and other  reports  that may
have  contained  misstatements,  and the  purported  failure  of the  Company to
maintain books and records that accurately reflected its financial condition and
operating  results.  To the Company's  knowledge,  this  investigation  has been
dormant for several years.

                                      -9-
<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

         In February 1993, the United States Attorney for the Middle District of
Pennsylvania issued a Grand Jury Subpoena seeking the production of documents as
a result of the Company's  announcement of accounting  irregularities.  In 1994,
Donald F. Kenia,  former  Controller  of the Company,  was indicted by a federal
grand jury in the Middle  District of  Pennsylvania  and  pleaded  guilty to the
crime of securities fraud in connection with the accounting  irregularities.  In
October 1996, Paul F. Polishan, former Senior Vice President and Chief Financial
Officer of the  Company,  was  indicted by the federal  grand jury in the Middle
District of Pennsylvania for actions relating to the accounting  irregularities.
The trial of the case against Paul F. Polishan began March 1, 2000.

         In March  1993,  a  stockholder  derivative  action  entitled  "Isidore
Langer,  derivatively  on behalf of The Leslie Fay  Companies,  Inc.  v. John J.
Pomerantz et al." was  instituted in the Supreme Court of the State of New York,
County of New York,  against  certain  officers and directors of the Company and
its then  auditors.  This complaint  alleges that the defendants  knew or should
have known  material  facts  relating  to the sales and  earnings of the Company
which they failed to disclose.  The time to answer, move or otherwise respond to
the complaint has not yet expired.  The plaintiff seeks an unspecified amount of
monetary  damages,  together  with  interest  thereon,  and costs  and  expenses
incurred in the action,  including reasonable  attorneys' and experts' fees. The
Company cannot presently determine the ultimate outcome of this litigation,  but
believes  that it  should  not  have any  unfavorable  impact  on its  financial
statements.  Pursuant to the Plan, a Derivative Action Board, comprised of three
persons or entities  nominated by the Creditors'  Committee and appointed by the
Bankruptcy  Court,  is the only entity  authorized to prosecute,  compromise and
settle or discontinue the derivative action.

7.       STOCKHOLDERS' EQUITY:

         At June 4, 1997, 6,800,000 shares, adjusted retroactively for a two for
one stock split effected on July 1, 1998,  were issued and  outstanding and were
being held by the plan administrator in trust. In July 1997,  5,372,000 (79%) of
the shares were  distributed.  During the period from  February 15, 1999 through
March 5,  1999,  approximately  1,250,000  (88%) of the  remaining  shares  were
distributed.  The remaining shares are being held back by the plan administrator
until the final disputed claims are settled before the Bankruptcy Court.

8.       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 $250,000 and $279,000 of non-cash stock based compensation  expense for
the thirteen  weeks ended April 1, 2000 and April 3, 1999,  respectively.  These
amounts  were  offset as  adjustments  to  Capital in excess of par value in the
Consolidated Balance Sheets.

9.       NET INCOME PER SHARE:

         For the thirteen weeks ended April 1, 2000 and April 3, 1999, the basic
weighted   average  common  shares   outstanding  was  5,065,885  and  6,041,138
respectively,  and the weighted average shares outstanding assuming dilution was
5,497,009 and  6,144,820  respectively.  The  difference of 431,124 and 103,682,
respectively,  represents  the  incremental  dilution of shares upon exercise of
dilutive stock options.


                                      -10-
<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

10.      SUBSEQUENT EVENT:

         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.  Cynthia Steffe,  Inc., markets to both
department  and specialty  stores in the  contemporary  and designer  sportswear
categories.  The 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.


                                      -11-
<PAGE>


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

(A)  RESULTS OF  OPERATIONS

THIRTEEN WEEKS ENDED APRIL 1, 2000 AS COMPARED TO
THIRTEEN WEEKS ENDED APRIL 3, 1999

         The Company  recorded net sales of  $66,936,000  for the thirteen weeks
ended April 1, 2000,  compared  with  $61,144,000  for the thirteen  weeks ended
April 3, 1999, a net increase of  $5,792,000 or 9.5%.  The Dress product  line's
net sales, excluding $6,154,000 generated by the recently licensed Liz Claiborne
dress  brands,  increased  $1,848,000  or 4.2%.  A 39.5%  increase in the Warren
brands was offset by a 7.1% decrease in the Leslie Fay dress brands.  The Warren
brand sales  improvement  reflects business growth since acquiring the brands in
the fourth  quarter  of 1998.  The lower  level of Leslie  Fay dress  volume was
caused by  additional  price  concessions  to clear  product.  Net sales for the
Sportswear  product lines  decreased by $2,210,000 or 12.6%.  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 was expected to reduce sales and improve gross profit.

         Gross  profit  was  $15,640,000  and 23.4% of net sales  compared  with
$16,684,000  and 27.3% for the  thirteen  weeks ended April 1, 2000 and April 3,
1999,  respectively.  The gross  profit from the Dress line,  net of  $1,576,000
generated  by the  recently  licensed  Liz  Claiborne  dress  brands,  decreased
$2,763,000  while the percent to net sales decreased to 21.9% from 29.2% for the
comparable  period ended April 3, 1999. The Dress line  experienced a decline in
gross  profit  contribution  because of  decreased  markup and  increased  price
concessions to clear product.  The gross profit  produced by the Sportswear line
for the thirteen weeks ended April 1, 2000 increased by $143,000 and the percent
to net sales increased to 26.7% from 22.5% for the comparable period ended April
3, 1999.  The increased  gross profit as a percentage of net sales resulted from
the restructuring of the Leslie Fay Sportswear and Haberdashery brands.

         SG&A expenses were  $10,604,000  and 15.8% of net sales and $10,373,000
and 17.0% of net sales for the  thirteen  weeks ended April 1, 2000 and April 3,
1999,  respectively.  The expense  increase of $231,000 was caused mainly by the
additional  design,  selling and shipping  costs  relating to the Liz  Claiborne
Dress division.

         Non-cash  stock  based  compensation  for  stock  options  and  outside
director  compensation  that was  granted  after the  Company's  emergence  from
bankruptcy  for the  thirteen  weeks  ended  April 1, 2000 and April 3, 1999 was
$250,000 and $301,000, respectively.

         Other income was  $346,000  and  $349,000 for the thirteen  weeks ended
April 1, 2000 and April 3, 1999, respectively.

         Depreciation  and  amortization  expense for the  thirteen  weeks ended
April 1, 2000 and April 3, 1999,  was $440,000 and  $280,000  respectively.  The
increase was due to the  acquisition of fixed assets since the Company's June 4,
1997 emergence from bankruptcy.  In addition,  the Company  recognized income of
$1,143,000  for both periods  from  amortization  of excess  revalued net assets
acquired  over equity  under fresh start  reporting.  The excess of revalued net
assets  will be  fully  amortized  in the  second  quarter  of 2000  which  will
negatively impact earnings per share compared to prior periods.


                                      -12-


<PAGE>


                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES

         Interest  and  financing  costs  were  $862,000  and  $669,000  for the
thirteen  weeks  ended  April 1,  2000  and  April 3,  1999,  respectively.  The
additional  interest was generated as a result of higher  borrowings  during the
thirteen  weeks ended  April 1, 2000,  which were  invested in building  the Liz
Claiborne dress brands' working capital.  Also, the Company incurred  additional
interest  expense  during  the  period  ended  April 1,  2000 as a result of the
$5,000,000  term note payable  incurred on August  25,1999.  The financing  fees
under the new CIT Credit Agreement were partially offset by income earned on the
cash invested for the thirteen weeks ended April 1, 2000 and April 3, 1999.

         The provision for federal,  state and local income taxes was $1,671,000
and  $2,272,000  for the  thirteen  weeks ended April 1, 2000 and April 3, 1999,
respectively.

(B) LIQUIDITY AND CAPITAL RESOURCES

         The CIT Credit Agreement provides a working capital facility commitment
of  $42,000,000,  including a $25,000,000  sublimit on letters of credit.  As of
April 1, 2000 the Company was utilizing approximately  $13,277,000 under the CIT
Credit Agreement for letters of credit, and there was $12,001,000 in outstanding
cash  borrowings.  The Company had a net  borrowing  availability  under the CIT
Credit  Agreement of $16,722,000 on April 1, 2000 and peak borrowing  during the
thirteen weeks ended April 1, 2000 was $19,424,000.

         At April 1, 2000, the Company's cash and cash  equivalents  amounted to
$4,313,000, of which  $3,446,000  is  restricted  for  payment of the  remaining
administrative  claims,  which are  expected  to be made prior to the end of the
fiscal year.  Working capital increased $983,000 to $38,282,000 for the thirteen
weeks ended  April 1, 2000.  The changes in the  components  of working  capital
were: a decrease in cash and cash equivalents of $1,153,000;  an increase in net
accounts  receivable of  $27,405,000;  a decrease in  inventories  of $8,035,000
offset by  $2,420,000  for the Liz  Claiborne  Dress  inventory  acquisition;  a
decrease in prepaid  expenses  and other  current  assets of  $1,262,000  and an
increase  of  $18,392,000  in total  current  liabilities.  Accounts  receivable
increased due to the additional  volume  generated by the recently  licensed Liz
Claiborne  Dress  brands and the  historically  high  shipment of Spring  season
product during the period.  Total current  liabilities  increased as a result of
additional short term borrowings of $12,001,000,  increased  operating  accounts
payable and other accrued  liabilities of $6,391,000  resulting  mostly from the
higher inventory levels held, and additional income tax liabilities.

         Although the Company's  results of  operations  indicated net income of
$3,302,000  for the thirteen  weeks ended April 1, 2000,  these  results are not
indicative of results for an entire year.

         Capital  expenditures  were $238,000 for the thirteen weeks ended April
1, 2000.  Capital  expenditures  are expected to be  $3,050,000  for fiscal year
2000. The  anticipated  capital  expenditures  for the remainder of the year are
primarily  related  to  improvements  in  management  information  systems,  the
Company's first phase of a planned web site,  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.


                                     -13-

<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


         To support the working capital requirements of the Liz Claiborne
license, the Company is negotiating an increase to the CIT Credit Agreement.

         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, there remains no less than
$5,000,000 of unused borrowing capacity 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 April 1, 2000 the Company may
borrow up to $4,685,000 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 for
the fiscal year ended January 1, 2000 were not affected by any year 2000
problems. Since there was no material difference in the actual cost and that,
which was previously disclosed, there was no remediation dividend affecting
financial comparisons. 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.

                                      -14-

<PAGE>


                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


PART II  -  OTHER INFORMATION

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

         For information concerning legal proceedings at the end of the first
quarter of 2000, reference is made to Note 6 of the Notes to Consolidated
Financial Statements contained herein.

         No other legal proceedings were terminated during the first 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.
-------    ----------------------------------------------------

                  None

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.

                                      -15-

<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:  May 16, 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






                                      -16-


<PAGE>

                  THE LESLIE FAY COMPANY, INC. AND SUBSIDIARIES


                                INDEX TO EXHIBITS
                                -----------------

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

27                Financial Data Schedule.