<PAGE>   1

================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


(MARK ONE)

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 30, 1999, OR

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 FOR THE TRANSITION PERIOD FROM_____________TO_____________.


                         COMMISSION FILE NUMBER 33-66342

                            COLE NATIONAL GROUP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


             DELAWARE                                            34-1744334
(STATE OR OTHER JURISDICTION OF                               (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                               IDENTIFICATION NO.)


        5915 LANDERBROOK DRIVE
        MAYFIELD HEIGHTS, OHIO                                      44124
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                          (ZIP CODE)


                                 (440) 449-4100
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM IN THE REDUCED DISCLOSURE
FORMAT.

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 (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.    X  YES    NO
                                     ---     ---

ALL OF THE OUTSTANDING CAPITAL STOCK OF THE REGISTRANT IS HELD BY COLE NATIONAL
CORPORATION.

AS OF NOVEMBER 15, 1999, 1,100 SHARES OF THE REGISTRANT'S COMMON STOCK, $.01 PAR
VALUE, WERE OUTSTANDING.

================================================================================
<PAGE>   2



                   COLE NATIONAL GROUP, INC. AND SUBSIDIARIES
                                    FORM 10-Q
                         QUARTER ENDED OCTOBER 30, 1999
                                      INDEX

<TABLE>
<CAPTION>

                                                                                   PAGE NO.

<S>                                                                              <C>
PART I. FINANCIAL INFORMATION

        ITEM 1. FINANCIAL STATEMENTS

                CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 30, 1999
                AND JANUARY 30, 1999 .............................................     1

                CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE 13
                AND 39 WEEKS ENDED OCTOBER 30, 1999 AND
                OCTOBER 31, 1998 .................................................     2

                CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE 39
                WEEKS ENDED OCTOBER 30, 1999 AND OCTOBER 31, 1998 ................     3

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .......................   4 - 5

        ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS ..............................   6 - 9

        ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                MARKET RISK.......................................................     10


PART II.OTHER INFORMATION

        ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .................................     11

</TABLE>



<PAGE>   3

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                   COLE NATIONAL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                        October 30,    January 30,
ASSETS                                                      1999           1999
                                                         ---------      ---------
<S>                                                     <C>            <C>
Current assets:
    Cash and temporary cash investments                  $  22,793      $  51,057
    Accounts receivable, less allowance for doubtful
       accounts of $8,421 in 1999 and $7,189 in 1998        47,676         45,302
    Current portion of notes receivable                      4,386          2,707
    Refundable income taxes                                      -          1,113
    Inventories                                            133,849        119,881
    Prepaid expenses and other                               5,135          8,520
    Deferred income tax benefits                            14,546         13,742
                                                         ---------      ---------
          Total current assets                             228,385        242,322

Property and equipment, at cost                            258,403        246,597
    Less - accumulated depreciation and amortization      (143,281)      (133,595)
                                                         ---------      ---------
          Total property and equipment, net                115,122        113,002

Other assets:
    Notes receivable, excluding current portion             15,335         17,308
    Deferred income taxes and other                         56,638         51,555
    Intangible assets, net                                 158,144        159,698
                                                         ---------      ---------
          Total assets                                   $ 573,624      $ 583,885
                                                         =========      =========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
    Current portion of long-term debt                    $     662      $     407
    Accounts payable                                        63,181         70,125
    Payable to affiliates                                   73,078         69,060
    Accrued interest                                         7,090          6,216
    Accrued liabilities                                     83,019        101,040
    Accrued income taxes                                     3,644            131
                                                         ---------      ---------
          Total current liabilities                        230,674        246,979

Long-term debt, net of discount and current portion        274,215        274,706

Other long-term liabilities                                 14,491         13,954

Stockholder's equity                                        54,244         48,246
                                                         ---------      ---------
          Total liabilities and stockholder's equity     $ 573,624      $ 583,885
                                                         =========      =========

</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these consolidated balance sheets.

                                      -1-

<PAGE>   4


                   COLE NATIONAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>


                                                  13 Weeks Ended               39 Weeks Ended
                                             --------------------------  --------------------------
                                             October 30,    October 31,  October 30,    October 31,
                                                1999           1998          1999          1998
                                             -----------    -----------  -----------    -----------

<S>                                        <C>            <C>           <C>           <C>
Net revenue                                  $ 256,861      $ 255,615     $ 789,615     $ 792,929

Costs and expenses:
    Cost of goods sold                          86,354         84,910       263,857       264,331
    Operating expenses                         156,379        150,983       469,335       453,350
    Depreciation and amortization                9,363          8,421        26,632        24,441
                                             ---------      ---------     ---------     ---------
       Total costs and expenses                252,096        244,314       759,824       742,122
                                             ---------      ---------     ---------     ---------

Operating income                                 4,765         11,301        29,791        50,807

Interest and other (income) expense, net         6,702            814        19,891        14,374
                                             ---------      ---------     ---------     ---------

Income (loss) before income taxes               (1,937)        10,487         9,900        36,433

Income tax provision (benefit)                    (794)         1,840         4,059        12,478
                                             ---------      ---------     ---------     ---------

Net income (loss)                            $  (1,143)     $   8,647     $   5,841     $  23,955
                                             =========      =========     =========     =========

</TABLE>



The accompanying notes to consolidated financial statements are an integral part
of these consolidated statements.

                                      -2-

<PAGE>   5


                   COLE NATIONAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                39 Weeks Ended
                                                                           ------------------------
                                                                           October 30,  October 31,
                                                                              1999          1998
                                                                           -----------  -----------
<S>                                                                       <C>           <C>
  Cash flows from operating activities:
      Net income                                                           $  5,841      $ 23,955
      Adjustments to reconcile net income to net cash
         provided by operating activities:
             Depreciation and amortization                                   26,632        24,441
             Non-cash interest, net                                             799           788
             Change in assets and liabilities:
                Decrease (increase) in accounts and notes
                   receivable, prepaid expenses and other
                   assets                                                       959          (301)
                Increase in inventories                                     (13,968)      (30,947)
                Decrease in accounts payable, accrued
                   liabilities and other liabilities                        (23,537)      (13,153)
                Increase in accrued interest                                    874           608
                Increase in net income tax liabilities                        3,513         9,629
                                                                           --------      --------
                   Net cash provided by operating activities                  1,113        15,020
                                                                           --------      --------

  Cash flows from investing activities:
      Purchases of property and equipment, net                              (20,436)      (20,644)
      Systems development costs                                             (10,980)      (12,417)
      Acquisition of businesses, net                                         (2,281)       (6,848)
      Other, net                                                               (582)          284
                                                                           --------      --------
                   Net cash used by investing activities                    (34,279)      (39,625)
                                                                           --------      --------

  Cash flows from financing activities:
      Repayment of long-term debt                                              (303)      (14,973)
      Advances from (to) affiliates, net                                      5,338        (8,851)
      Other, net                                                               (133)         (267)
                                                                           --------      --------
                   Net cash provided (used) by financing activities           4,902       (24,091)
                                                                           --------      --------

  Cash and temporary cash investments:
      Net decrease during the period                                        (28,264)      (48,696)
      Balance, beginning of the period                                       51,057        67,989
                                                                           --------      --------
      Balance, end of the period                                           $ 22,793      $ 19,293
                                                                           ========      ========

</TABLE>



The accompanying notes to consolidated financial statements are an integral part
of these consolidated statements.


                                      -3-
<PAGE>   6


                   COLE NATIONAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


(1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES

      Cole National Group, Inc. is a wholly owned subsidiary of Cole National
Corporation. The consolidated financial statements include the accounts of Cole
National Group and its wholly owned subsidiaries (collectively, the "Company").
All significant intercompany transactions have been eliminated in consolidation.

      The accompanying consolidated financial statements have been prepared
without audit and certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, although management
believes that the disclosures herein are adequate to make the information not
misleading. Results for interim periods are not necessarily indicative of the
results to be expected for the full year. These statements should be read in
conjunction with the Company's consolidated financial statements and notes
thereto included in its annual report on Form 10-K for the fiscal year ended
January 30, 1999.

      In the opinion of management, the accompanying financial statements
contain all adjustments (consisting only of normal recurring accruals) necessary
to present fairly Cole National Group's financial position as of October 30,
1999 and the results of operations and cash flows for the 39 weeks ended October
30, 1999 and October 31, 1998.

      Inventories

      The accompanying interim consolidated financial statements have been
prepared without physical inventories.

      Cash Flows

      Net cash flows from operating activities reflect cash payments for income
taxes and interest of $407,000 and $18,676,000, respectively, for the 39 weeks
ended October 30, 1999, and $1,618,000 and $19,090,000, respectively, for the 39
weeks ended October 31, 1998.

(2) RESTRUCTURING CHARGE

      In the fourth quarter of fiscal 1998, the Company recorded a restructuring
charge primarily related to Pearle's operations. The Company's restructuring
plan included the closing of certain unprofitable stores during fiscal 1999,
and removing surfacing equipment from certain in-store full service labs
through the second quarter of 2000. The estimated costs of the  restructuring
are expected to approximate original estimates. During the first 39 weeks of
fiscal 1999, the Company closed a total of 25 Pearle stores. The restructuring
reserves remaining at January 30, 1999 were $7.1 million, of which
approximately $6.0 million were paid in the first 39 weeks of fiscal 1999. The
remaining reserve at October 30, 1999 of $1.1 million is expected to be paid
through the first quarter of fiscal 2000. The Company is currently reevaluating
its plan to remove labs from certain stores and, as a result, has closed no
in-store labs in fiscal 1999. Since there were no costs accrued at January 30,
1999 related to closing of any in-store labs, any revisions to this portion of
the original plan will have no effect on the restructuring reserves remaining.

                                      -4-

<PAGE>   7


(3) CREDIT FACILITY

      In August 1999, the credit facility was amended and extended until January
31, 2003. Borrowings under the credit facility initially bear interest based on
leverage ratios at a rate equal to, at the option of the principal operating
subsidiaries of Cole National Group, either (a) the Eurodollar Rate plus 2% or
(b) 1% plus the highest of (i) the prime rate, (ii) the three-week moving
average of the secondary market rates for three-month certificates of deposit
plus 1% and (iii) the federal funds rate plus .5%. Cole National Group pays a
commitment fee of between .375% and .75% per annum on the total unused portion
of the facility based on the percentage of revolving credit commitments used.

(4) SEGMENT INFORMATION

      Information on the Company's reportable segments is as follows (000's
omitted):

<TABLE>
<CAPTION>

                                                          13 Weeks Ended        39 Weeks Ended
                                                       --------------------  --------------------
                                                        Oct. 30,   Oct. 31,   Oct. 30,   Oct. 31,
                                                          1999       1998      1999        1998
                                                       ---------  ---------  ---------  ---------
              <S>                                      <C>       <C>        <C>         <C>
                Net revenue:
                    Cole Vision                        $ 203,672  $ 206,108  $ 619,157  $ 633,451
                    Things Remembered                     53,189     49,507    170,458    159,478
                                                       ---------  ---------  ---------  ---------
                      Consolidated net revenue         $ 256,861  $ 255,615  $ 789,615  $ 792,929
                                                       =========  =========  =========  =========

                Income or loss:
                    Cole Vision                        $   6,622  $  15,230  $  25,040  $  51,204
                    Things Remembered                        270     (2,440)     9,408      3,902
                                                       ---------  ---------  ---------  ---------
                      Total segment profit                 6,892     12,790     34,488     55,106
                Unallocated amounts:
                    Corporate expenses                    (2,127)    (1,489)    (4,657)    (4,299)
                                                       ---------  ---------  ---------  ---------
                      Consolidated operating income        4,765     11,301     29,791     50,807
                Interest and other expense, net           (6,702)      (814)   (19,891)   (14,374)
                                                       ---------  ---------  ---------  ---------
                      Income before income taxes       $  (1,937) $  10,487  $   9,900  $  36,433
                                                       =========- =========  =========  =========

</TABLE>

(5) RECLASSIFICATIONS

      Certain 1998 amounts have been reclassified to conform with the 1999
presentation.

(6) ACQUISITIONS AND DISPOSITIONS

      During the third quarter of fiscal 1999, the Company acquired MetLife's
managed vision care benefits business. The business consists of vision care
contracts with over 250 institutional customers and generates approximately
$15.0 million of revenue annually. The initial purchase price totaled $2.0
million, with additional amounts contingently due upon certain conditions being
met over the next four years. The acquisition is being accounted for under the
purchase method of accounting, including any contingent payments that may be
made in the future.

      On November 23,1999 the Company announced that, by the end of the fourth
quarter, it plans to exit the 150 Wards Optical departments that it operates.
The Company expects to incur a pretax loss associated with these closings of
approximately $2.0 - $2.5 million in the fourth quarter, primarily consisting of
inventory and fixed asset write-offs. The after-tax cash cost of the closings is
expected to be minimal.

                                      -5-

<PAGE>   8


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

      Certain information required by this item has been omitted pursuant to
General Instruction H of Form 10-Q.

      The following is a discussion of certain factors affecting Cole National
Group's results of operations for the 13 and 39 week periods ended October 30,
1999 and October 31, 1998 (the Company's third quarter and first nine months).
This discussion should be read in conjunction with the consolidated financial
statements and notes thereto included elsewhere in this filing and the audited
financial statements for the fiscal year ended January 30, 1999 included in the
annual report on Form 10-K.

      Fiscal years end on the Saturday closest to January 31 and are identified
according to the calendar year in which they begin. For example, the fiscal year
ended January 30, 1999 is referred to as "fiscal 1998." The current fiscal year,
which will end January 29, 2000, is referred to as "fiscal 1999."

RESULTS OF OPERATIONS

      The following table sets forth certain operating information for the third
quarter and first nine months of fiscal 1999 and fiscal 1998 (dollars in
millions):

<TABLE>
<CAPTION>

                                           Third Quarter                        First Nine Months
                                 ---------------------------------     -----------------------------------
                                 Fiscal       Fiscal                     Fiscal      Fiscal
                                  1999         1998        Change         1999         1998         Change
                                  ----         ----        ------         ----         ----         ------

<S>                            <C>           <C>         <C>          <C>         <C>           <C>
Net Revenue-
  Cole Vision                   $  203.7     $  206.1       (1.2%)     $   619.1    $   633.4       (2.3%)
  Things Remembered                 53.2         49.5        7.4%          170.5        159.5        6.9%
                                --------     --------                  ---------    ---------
    Total net revenue           $  256.9     $  255.6        0.5%      $   789.6    $   792.9       (0.4%)

Gross profit                    $  170.5     $  170.7       (0.1%)     $   525.7    $   528.6       (0.5%)
Operating expenses                 156.3        151.0        3.6%          469.3        453.4        3.5%
Depreciation & amortization          9.4          8.4       11.2%           26.6         24.4        9.0%
                                --------     --------                  ---------    ---------
    Operating income            $    4.8     $   11.3      (57.8%)     $    29.8    $    50.8      (41.4%)
                                ========     ========                  =========    =========


Percentage of Net Revenue-
  Gross margin                      66.4%        66.8%      (0.4)           66.6%        66.7%      (0.1)
  Operating expenses                60.9         59.1        1.8            59.4         57.2        2.2
  Depreciation & amortization        3.6          3.3        0.3             3.4          3.1        0.3
                                --------     --------                  ---------    ---------
    Operating income                 1.9%         4.4%      (2.5)            3.8%         6.4%      (2.6)
                                ========     ========                  =========    =========


Number of Retail Locations
  at the End of the Period-
    Cole Licensed Brands           1,199        1,180
    Pearle company-owned             455          469
    Pearle franchised                412          406
                                --------     --------
      Total Cole Vision            2,066        2,055
    Things Remembered                811          827
                                --------     --------
      Total Cole National          2,877        2,882
                                ========     ========

</TABLE>

                                      -6-

<PAGE>   9


      The softness in net revenue for the third quarter and first nine months of
fiscal 1999 was primarily attributable to decreases in consolidated comparable
store sales, partially offset by $1.4 million of revenue from the sale of rights
under various franchise and other agreements for 13 franchised stores. Changes
in comparable store sales by business compared to the same period a year ago
were:

                                          Third Quarter   First Nine Months
                                          -------------   -----------------

      Cole Licensed Brands (U.S.)             0.3%             (3.0%)
      Pearle company-owned (U.S.)            (6.9%)            (6.2%)
         Total Cole Vision                   (1.7%)            (3.8%)
      Things Remembered                       7.8%              7.3%
         Total Cole National                  0.4%             (1.3%)

      Sales at Cole Licensed Brands have been negatively impacted by a
competitive promotional environment. Licensed Brands' response which began at
the end of the second quarter produced an improvement in third quarter sales.
Sales this year at Pearle have also been impacted by the competitive promotional
environment and Pearle's focus, earlier in the year, on long-term,
brand-building in its advertising campaign, as well as operating and systems
issues that the Company is addressing. Pearle refocused its marketing efforts to
become more promotional during the second and third quarters, but to date has
not achieved any sustained improvement in comparable store sales trends. The
third quarter sales decrease at Cole Vision reflected a lower average selling
price for spectacles and contact lenses due primarily to more promotional
pricing, partially offset by increased unit sales at Cole Licensed Brands. At
Things Remembered, the comparable store sales increase reflected increased sales
of additional personalization and new merchandise at higher average unit
retails, along with the benefits from marketing directly to its existing
customer base. The number of transactions at Things Remembered in the third
quarter was slightly behind a year ago. During the first nine months of fiscal
1999, the Company opened 95 new locations and closed 102 locations.

      The gross profit decreases for the third quarter and first nine months of
fiscal 1999 compared to those same periods in fiscal 1998 were primarily
attributable to the lower revenue at Cole Vision, partially offset by higher
revenue at Things Remembered. Gross margin at Cole Vision declined 0.9 and 0.5
percentage points in the third quarter and first nine months of fiscal 1999,
respectively, compared to the same periods last year. The lower gross margin at
Cole Vision was due in part to the impact of more promotional pricing, lower
margins on contact lenses and costs resulting from problems that arose during
the integration of Pearle's new manufacturing and merchandise/inventory
management systems. The integration of these systems with Pearle's existing
warehouse management system resulted in manufacturing and distribution
inefficiencies that led to increased costs and lost sales in the quarter.
Progress has been made to date in bringing the systems up to pre-installation
expectations; however, some continuing inefficiencies are expected to have a
negative impact on fourth quarter earnings. Gross margin at Things Remembered
improved 1.1 and 1.2 percentage points in the third quarter and first nine
months of fiscal 1999, respectively, benefiting from increased sales of
additional personalization and higher margins from new products.

      The unfavorable leverage in operating expenses for the third quarter was
primarily attributable to a 0.5 percentage point increase in managed vision care
costs and a 0.5 percentage point increase in payroll costs. The unfavorable
leverage for the first nine months was primarily attributable to a 0.9
percentage

                                      -7-

<PAGE>   10

point increase in payroll costs, a 0.5 percentage point increase in managed
vision care costs and a 0.3 percentage point increase in net advertising
expenditures. The unfavorable payroll leverages were primarily due to the
comparable store sales decreases at Cole Vision and staffing increases in
managed vision care, partly offset by payroll leverage gains on the sales
increases at Things Remembered. The increases in managed vision care expenses
were primarily attributable to growth in call and claims volumes associated with
increases in sponsor-funded programs. The unfavorable advertising leverage was
due to increased advertising at Cole Licensed Brands in response to the
competitive pricing environment, partly offset by reduced spending at Pearle.
The depreciation and amortization expense increases were attributable to
increases in amortization of systems development and software costs.

      See the notes to consolidated financial statements for information on the
status of the Company's restructuring charge recorded in the fourth quarter of
fiscal 1998.

      The decreases in income from operations were primarily the result of the
decreases in net revenue and gross profit, and the increases in operating
expenses and depreciation and amortization. Interest and other income includes
the recognition of $6.0 million of income in the third quarter of fiscal 1998
from a nontaxable cash settlement with the former owner of Pearle. Excluding the
Pearle settlement, net interest and other expense in fiscal 1999 decreased
slightly from the third quarter and first nine months of fiscal 1998. An income
tax provision was recorded in the first nine months of fiscal 1999 and fiscal
1998 using the Company's estimated annual effective tax rate of 41% in both
years.

YEAR 2000

      The Company is proceeding with the implementation of its Year 2000
Readiness Program, including ascertaining Year 2000 readiness of critical third
parties. Management believes that all critical programs and hardware are Year
2000 ready, including Y2K testing. As a precautionary measure, end-to-end Y2K
testing is being performed throughout the month of December. The Company has
communicated with its critical third party business partners and has received a
positive response of 90% overall. Contingency business relationships have been
set up for those who did not respond to the Company's inquiries. Detailed backup
and contingency plans for the year-end crossover are currently being developed
and management believes that they will be completed by mid-December.

      Management estimates the total cost of the Year 2000 Readiness Program
will be approximately $4.2 million, including $1.0 million of new hardware and
software that has been capitalized. The remaining $3.2 million is being expensed
as incurred (approximately $2.4 million in fiscal 1998 and $0.8 million in
fiscal 1999, including $0.6 million during the first nine months). These costs
include only external costs as internal costs, which consist primarily of
payroll-related costs of employees, are not tracked separately for the Year 2000
Readiness Program. The estimate of external costs does not include costs
associated with addressing and resolving issues as a result of the failure of
third parties to become Year 2000 ready. See the Company's Annual Report on Form
10-K for the fiscal year ended January 30, 1999 for further discussion of Year
2000.

                                      -8-

<PAGE>   11


RECENT DEVELOPMENTS AND FORWARD-LOOKING INFORMATION

      In the fourth quarter of fiscal 1999, the Company will continue to respond
to the competitive pricing environment that exists in the retail optical
industry. In addition, costs and expenses will be incurred to begin addressing
merchandise, field/store and franchise support, systems integration and other
initiatives with a primary focus of increasing comparable store sales growth in
the upcoming fiscal year. These actions may cause a negative impact on gross
margin and operating expenses before any significant sales improvements are
realized. As a result, it is unlikely there will be an improvement in the sales
and earnings trends of the Company's vision segment for the balance of fiscal
1999.

      Further, the Company recently announced it has decided to exit the 150
Wards Optical departments it operates by the end of the fourth quarter of fiscal
1999 to focus its resources on enhancing the performance of its remaining vision
businesses. As a result, a pretax charge in the range of $2.0 - $2.5 million is
expected to be included in fourth quarter operating results for the costs to
close these stores. The net after tax cash cost of the closing is expected to be
minimal.

      Certain sections of this Form 10-Q, including this Management's Discussion
and Analysis, contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from those forecast due to a variety of factors that can adversely
affect operating results, liquidity and financial condition such as risks
associated with the timing and achievement of the continuing restructuring and
improvements in the operations of the optical business, the ability of Cole
National Group and its suppliers, host stores, and managed vision care
organization partners to achieve Year 2000 readiness, the integration of
acquired operations, the ability to select, stock and price merchandise
attractive to customers, success of systems integration, competition in the
optical industry, economic and weather factors affecting consumer spending,
operating factors affecting customer satisfaction, including manufacturing
quality of optical and engraved goods, relationships with host stores and
franchisees, the mix of goods sold, pricing and other competitive factors, and
the seasonality of the business. Forward-looking statements are made based upon
management's expectations and beliefs concerning future events impacting Cole
National Group. All forward-looking statements involve risk and uncertainty.

                                      -9-

<PAGE>   12


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company is exposed to market risk from changes in foreign currency
exchange rates, which could impact its results of operations and financial
condition. Foreign exchange risk arises from the Company's exposure in
fluctuations in foreign currency exchange rates because The Company's reporting
currency is the United States dollar. Management seeks to minimize the exposure
to foreign currency fluctuations through natural internal offsets to the fullest
extent possible.

                                      -10-

<PAGE>   13


                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. The following Exhibits are filed herewith and made a part hereof:

    27  Financial Data Schedule



(b) Report on Form 8-K

    The Company has not filed any reports on Form 8-K for the quarterly period
    ended October 30, 1999.

                                      -11-

<PAGE>   14



                                    SIGNATURE
                                    ---------

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


                           COLE NATIONAL GROUP, INC.



                           By:    /s/ Wayne L. Mosley
                              --------------------------------------
                              Wayne L. Mosley
                              Vice President and Controller
                              (Duly Authorized Officer and Principal
                              Accounting Officer)

                           Date: December 3, 1999


                                      -12-

<PAGE>   15

                            COLE NATIONAL GROUP, INC.
                                    FORM 10-Q
                         QUARTER ENDED OCTOBER 30, 1999

                                  EXHIBIT INDEX



Exhibit
Number      Description
------      -----------

27          Financial Data Schedule


                                      -13-