<PAGE>   1
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                  FORM 10-Q

            [X] Quarterly Report Pursuant to Section 13 OR 15(d)
                   of the Securities Exchange Act of 1934

                For the quarterly period ended March 31, 1997
                                               --------------
                                     OR

            [ ] Transition Report Pursuant to Section 13 or 15(d)
                   of the Securities Exchange Act of 1934

                      Commission file number:  1-12424
                      --------------------------------

                             HORIZON GROUP, INC.
           ------------------------------------------------------
           (Exact name of Registrant as specified in its Charter)



           MICHIGAN                                    38-2559212
           --------                                    ----------
(State or other jurisdiction              (I.R.S. employer identification no.)
of incorporation or organization)


5000 HAKES DRIVE, NORTON SHORES, MI                     49441
-----------------------------------                   ---------
(Address of principal executive offices)              (Zip Code)


                                (616) 798-9100
             ----------------------------------------------------
             (Registrant's telephone number, including area code)


                                Not Applicable
  -------------------------------------------------------------------------
  Former name, former address and former fiscal year, if changed since last
                                    report


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.                    Yes  X      No
                                                                 ---        ---
     NUMBER OF COMMON SHARES OUTSTANDING AT MAY 8, 1997           23,813,203
                                                                  ----------
                                       1

<PAGE>   2


                             HORIZON GROUP, INC.
                              Index to Form 10-Q
                                March 31, 1997


                                                                       Page No.
                                                                       --------
Part I.  Financial Information:

         Consolidated Condensed Statements of Income for the
         three months ended March 31, 1997 and 1996 . . . . . . . . . . .  3

         Consolidated Condensed Balance Sheets as of
         March 31, 1997 and December 31, 1996 . . . . . . . . . . . . . .  4

         Consolidated Condensed Statements of Cash Flows for the
         three months ended March 31, 1997 and 1996 . . . . . . . . . . .  5


         Notes to Consolidated Condensed Financial Statements . . . . .  6-7


         Management's Discussion and Analysis of Results of Operations
         and Financial Condition . . . . . . . . . . . . . . . . . . .  8-11




Part II.

         Other Information   . . . . . . . . . . . . . . . . . . . . .    12


         Signatures  . . . . . . . . . . . . . . . . . . . . . . . . .    13





                                       2


<PAGE>   3


                              HORIZON GROUP, INC.
                  Consolidated Condensed Statements of Income
               For the three months ended March 31, 1997 and 1996
                                  (unaudited)


<TABLE>
<CAPTION>

                                                   Three months ended
                                                        March 31,
                                                   ------------------
                                                    1997        1996
                                                    ----        ----
                                           (thousands, except per share data)
<S>                                             <C>         <C>
REVENUE
 Base rent                                        $  27,369   $  27,212   
 Percentage rent                                        916         608   
 Expense recoveries                                   8,777       7,786   
 Other                                                1,694       1,398   
                                                  ---------   ---------   
  Total revenue                                      38,756      37,004   
                                                  ---------   ---------   
EXPENSES                                                                  
 Property operating                                   6,392       5,608   
 Real estate taxes                                    3,390       2,640   
 Land leases and other                                2,763         129   
 Depreciation and amortization                        9,882       7,717   
 General and administrative                           2,603       2,003   
 Interest                                            11,411       8,827   
                                                  ---------   ---------   
  Total expenses                                     36,441      26,924   
                                                  ---------   ---------   
Net income before minority interests                  2,315      10,080   
Minority interests                                     (983)     (2,601)  
                                                  ---------   ---------   
NET INCOME                                        $   1,332   $   7,479   
                                                  =========   =========   
PER SHARE:                                                                
 Net income                                       $     .06   $     .39  
                                                  =========   =========   
 Cash dividend                                    $     .35   $    .505  
                                                  =========   =========   
Average common shares outstanding                    23,661      19,121   
                                                  =========   =========   
</TABLE>

     See accompanying notes to consolidated condensed financial statements.



                                       3


<PAGE>   4


                              HORIZON GROUP, INC.
                     Consolidated Condensed Balance Sheets
                   as of March 31, 1997 and December 31, 1996
                                  (unaudited)




<TABLE>
<CAPTION>

                                                             March 31,         December 31,        
                                                              1997                1996            
                                                             ---------         ------------        
ASSETS                                                               (thousands)                  
<S>                                                         <C>            <C>               
Real estate - at cost:                                                                          
 Land                                                          $  135,078     $  135,078        
 Buildings and improvements                                       951,887        938,412        
 Less accumulated depreciation                                    (70,528)       (65,490)       
                                                               ----------     ----------        
   Total real estate                                            1,016,437      1,008,000        
Cash and cash equivalents                                          19,341         18,572        
Tenant accounts receivable                                          8,367          6,807        
Due from joint venture                                             11,094         13,764        
Assets held for sale                                               13,075         13,075        
Deferred costs                                                     18,832         20,696        
Other assets                                                       12,797         14,307        
                                                               ----------     ----------        
   Total assets                                                $1,099,943     $1,095,221        
                                                               ==========     ==========        
LIABILITIES AND SHAREHOLDERS' EQUITY                                                            
LIABILITIES:                                                                                    
Mortgages and other debt                                       $  574,863     $  557,672        
Accounts payable and accrued expenses                              28,010         31,300        
Prepaid rents and other tenant liabilities                          2,500          5,568        
Other liabilities                                                   6,864          5,524        
Dividends and distributions payable                                 9,902         14,832        
                                                               ----------     ----------        
   Total liabilities                                              622,139        614,896        
                                                               ----------     ----------        
MINORITY INTERESTS                                                105,168        116,444        
                                                               ----------     ----------        
SHAREHOLDERS' EQUITY:                                                                           
Common shares                                                         238            228        
Additional paid-in capital                                        464,384        448,637        
Distributions in excess of net income                             (91,986)       (84,984)       
                                                               ----------     ----------        
   Total shareholders' equity                                     372,636        363,881        
                                                               ----------     ----------        
   Total liabilities and shareholders' equity                  $1,099,943     $1,095,221        
                                                               ==========     ==========        
</TABLE>

See accompanying notes to consolidated condensed financial statements.


                                       4


<PAGE>   5



                              HORIZON GROUP, INC.
                Consolidated Condensed Statements of Cash Flows
               For the three months ended March 31, 1997 and 1996
                                  (unaudited)


<TABLE>
<CAPTION>
                                                           Three months ended
                                                               March 31,
                                                           ------------------
                                                           1997          1996
                                                           ----          ----
                                                               (thousands)
<S>                                                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                             $  1,332       $ 7,479 
 Adjustments to reconcile net income to net cash                               
  provided by (used in) operating activities:                                  
  Minority interests in net income                           983         2,601 
  Depreciation and amortization                           10,494         8,016 
  Compensation related to stock bonus arrangements             -            31 
Changes in assets and liabilities:                                             
  Tenant accounts receivable                              (1,560)          (96)
  Due from joint venture                                   2,670             - 
  Deferred costs and other assets                          2,617        (5,835)
  Accounts payable and accrued expenses                   (2,905)       (1,741)
  Other liabilities                                        1,340         1,125 
  Prepaid rents and other tenant expenses                 (3,068)       (1,063)
                                                        --------       ------- 
   Net cash provided by operating activities              11,903        10,517 
                                                        --------       ------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                          
  Expenditures for real estate and improvements          (18,519)      (31,273)
                                                        --------       ------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                          
  Proceeds from issuance of common stock                   5,915             - 
  Dividends                                              (12,098)       (9,330)
  Distributions - minority interests                      (3,583)       (3,581)
  Proceeds from borrowings                                     -        65,000 
  Principal payments on mortgages and other debt          (1,495)      (37,643)
  Debt issue costs                                          (134)       (1,240)
   Net proceeds from revolving credit facility            18,780         3,147 
                                                        --------       ------- 
     Net cash provided by financing activities             7,385        16,353 
                                                        --------       ------- 
      Net increase (decrease) in cash                        769        (4,403)
                                                                               
CASH:                                                                          
 Beginning of period                                      18,572         6,567 
                                                        --------       ------- 
 End of period                                          $ 19,341       $ 2,164 
                                                        ========       ======= 

</TABLE>

See accompanying notes to consolidated condensed financial statements.

                                       5


<PAGE>   6



                              HORIZON GROUP, INC.
              Notes to Consolidated Condensed Financial Statements
                                  (unaudited)


(1)     Financial Statement Presentation

        The accompanying unaudited consolidated condensed financial     
        statements have been prepared in accordance with the instructions to
        Form 10-Q and do not include all information and footnotes necessary for
        a fair presentation of financial position, results of operations and
        cash flows in conformity with generally accepted accounting principles
        since it is assumed the user of these statements is reading them in
        conjunction with the most recent year-end audited financial statements. 
        In the opinion of management, the consolidated condensed financial
        statements contain all normal, recurring adjustments necessary for a
        fair statement of financial results for the interim periods presented.
        The preparation of these financial statements require management to make
        estimates and assumptions that affect the amounts reported in the
        financial statements and accompanying notes.  Actual results could
        differ from these estimates.  For further information, refer to the
        consolidated financial statements and notes thereto included in the
        Company's annual report on Form 10-K for the year ended December 31,
        1996.


(2)     Earnings Per Share

        In February, 1997, the Financial Accounting Standards Board issued
        Statement No. 128, Earnings per Share, which is required to be adopted
        on December 31, 1997.  At that time, the Company will be required to
        change the method currently used to compute earnings per share and to
        restate all prior periods.  Under the new requirements for calculating
        primary earnings per share, the dilutive effect of stock options will
        be excluded.  There will be no change in the Company's calculated
        primary earnings per share and fully diluted earnings per share for the
        first quarter under this statement.


(3)     Mortgages and Debt

        The Company's existing credit facilities contain various covenants      
        that, among the most restrictive, require the Company to maintain
        certain financial ratios and minimum net worth levels measured at the
        end of each quarter.  While current in the payment of principal and
        interest, the Company was not in compliance with the aforementioned
        covenants at March 31, 1997.  Each of the affected lenders has provided
        waivers to the Company for the March 31, 1997 measurement date.  The
        Company currently anticipates that similar waivers may be required for
        subsequent quarters unless amendments or refinancing is obtained. While
        the Company has no reason to believe such waivers will not be given and
        that it will not be able to obtain refinancing with a coverage test or
        amendments that will permit the Company to satisfy the new terms on a
        going forward basis, if required, there



                                       6


<PAGE>   7


                              HORIZON GROUP, INC.
              Notes to Consolidated Condensed Financial Statements
                                  (unaudited)


        can be no assurance that such waivers will be given or that such
        amendments or refinancing will be available at terms acceptable to the
        Company.  The financial statements do not include any adjustments
        relating to this uncertainty.

        In April, 1997, the Company received a $21.5 million construction loan
        from a bank for its 224,000 square foot Lee, Massachusetts project, of
        which $6.6 million was initially funded. The construction loan, which
        matures in October, 1997, provides for interest only payments during
        the term at an interest rate of LIBOR plus 2.25%.  The project serves
        as security for the loan, which is recourse to the Company.



                                       7


<PAGE>   8


                              HORIZON GROUP, INC.
         Management's Discussion and Analysis of Results of Operations
                            and Financial Condition
                   For the three months ended March 31, 1997
                                  (unaudited)


General Overview

Horizon Group, Inc. (the "Company") is a Real Estate Investment Trust that
owns, operates and develops outlet shopping centers.  The Company's growth is
derived from developing new outlet shopping centers, expanding existing outlet
shopping centers, acquiring outlet shopping centers and increasing rental
revenue at its existing outlet shopping centers.  The operations of the Company
are conducted through a majority-owned subsidiary, Horizon/Glen Outlet Centers
Limited Partnership, (the "Operating Partnership").  As of March 31, 1997, the
Company owned 84.2 percent of the Operating Partnership.


Results of Operations

Net income before minority interests decreased $7.8 million in the first
quarter of 1997 from $10.1 million for the corresponding 1996 period primarily
due to the impact of expensing the Dole Cannery space lease together with
higher interest expense and depreciation not offset by increased revenues.  The
increased depreciation, amortization and interest costs are associated with the
addition of two new centers and eight expansions to existing centers that
increased the Company's gross leasable area ("GLA") by approximately one
million square feet.

Property operating and real estate tax expense, as well as the Company's
revenue from expense recoveries, has increased as a result of the Company's
additional GLA.  General and administrative expense increased from $2.0 million
in the first quarter of 1996 to $2.6 million in the first quarter of 1997, due
to declining capitalization principally from decreasing development activity in
1997.  In April, 1997, the Company reduced its development staff and announced
that the management of its development activities will be outsourced.  All of
the development staff expenditures have been previously capitalized.

Consolidated revenues were as follows (in thousands):


<TABLE>
<CAPTION>

                                                   Three months ended March 31,
                                                   ----------------------------
                                                                     Percentage
                                                       1997     1996  Increase
                                                       ----     ----  --------

                 <S>                              <C>       <C>      <C>
                 Base rent                          $27,369  $27,212     .6%
                 Percentage rent                        916      608   50.7%
                 Expense recoveries                   8,777    7,786   12.7%
                 Other                                1,694    1,398   21.2%
                                                    -------  -------   ----- 
                                                    $38,756  $37,004    4.7%
                                                    =======  =======   ===== 
</TABLE>


                                       8


<PAGE>   9



                              HORIZON GROUP, INC.
         Management's Discussion and Analysis of Results of Operations
                      and Financial Condition (continued)
                   For the three months ended March 31, 1997
                                  (unaudited)


Base rents increased in the current comparable three month period principally
due to increased GLA.  Percentage rent increased in the current comparable
three months due to improved tenant sales.  Weighted average rent per square
foot of GLA as of March 31, 1997, was $14.57 compared to $14.31 as of March 31,
1996.  Increases in expense recoveries from tenants in the current quarter as
compared to the prior year resulted principally from additional GLA.  Other
income increased in the three-month period from higher interest and lease
termination income partially offset by lower marketing commissions.

Occupancy of the core outlet center portfolio, which excludes Dole, the
Muskegon power center, New Mexico and the two properties held for sale, Holland
and Port Huron, was 90.3% at March 31, 1997 versus 94.3% at March 31, 1996.
Occupancy on a total gross leasable area basis for the entire portfolio, was
86.9% at March 31, 1997 compared to 92.4% at March 31, 1996.  Occupancy at
"stabilized" assets, which is calculated by including only the leased GLA at
properties in stabilization, declined from 93.4% at March 31, 1996 to 89.3% at
March 31, 1997.


Liquidity and Capital Resources

The Company's existing credit facilities contain various covenants that, among
the most restrictive, require the Company to maintain certain financial ratios
and minimum net worth levels measured at the end of each quarter.  While
current in the payment of principal and interest, the Company was not in
compliance the aforementioned covenants at March 31, 1997.  Each of the
affected lenders has provided waivers to the Company for the March 31, 1997
measurement date.  The Company currently anticipates that similar waivers may
be required for subsequent quarters unless amendments or refinancing is
obtained.  While the Company has no reason to believe such waivers will not be
given and that it will not be able to obtain refinancing with a coverage test
or amendments that will permit the Company to satisfy the new terms on a going
forward basis, if required, there can be no assurance that such waivers will be
given or that such amendments or refinancing will be available at terms
acceptable to the Company.

On May 9, 1997, the Company  received a commitment, subject to legal and
underwriting due diligence, from an institutional lender for a $325.0 million
credit facility with a two year term and a floating interest rate tied to
LIBOR. The Company will use rate protection agreements to limit its exposure 
under this credit facility.  Proceeds, if consummated, from this credit 
facility will be used to repay $229.7 million of existing debt and provides 
funding for anticipated construction, acquisition and working capital needs 
through 1998.



                                       9


<PAGE>   10




                              HORIZON GROUP, INC.
         Management's Discussion and Analysis of Results of Operations
                      and Financial Condition (continued)
                   For the three months ended March 31, 1997
                                  (unaudited)


In January, 1997, the Company issued approximately 317,000 shares of common
stock under the Company's Dividend Reinvestment Plan ("DRIP") with total
proceeds of $5.9 million.  The Company has discontinued further stock issuances
under the DRIP based on the current market price of the Company's stock.

During 1997, the Company plans to spend approximately $41.0 million, of which
$18.5 million was spent in the first quarter, to continue expansion or
development of its centers.  The Company plans to fund this expansion and
development with existing cash balances, cash flow from operations and
additional borrowings.

The Company believes it will have access to the capital resources necessary to
expand and develop its business. The Company anticipates that existing cash
balances and cash flow from operations, together with cash from borrowings and
other sources, will be adequate to meet the capital and liquidity needs of the
Company.  The Company expects to meet its short-term borrowing requirements
primarily through floating-rate debt financing and its revolving and
construction credit facilities.  To meet its long-term liquidity requirements,
the Company intends to obtain funds through additional equity offerings or
long-term debt financing in a manner consistent with its debt to total market
capitalization policy.

The Company declared a $.35 dividend per common share in the first quarter of
1997.  In order to qualify as a Real Estate Investment Trust ("REIT") for
Federal income tax purposes, the Company is required to pay dividends to its
shareholders of at least 95% of its REIT taxable income.  The Company intends
to pay those dividends from cash flow from operations which is expected to
increase due to future growth in rental revenues at existing outlet shopping
centers and cash flow from expansions, acquisitions and new developments.
Although the Company intends to make distributions to its shareholders in
accordance with the requirements of the Internal Revenue Code of 1986, as
amended, it also intends to retain such amounts as it considers necessary from
time to time for the acquisition or development of new properties as suitable
opportunities arise and for the expansion and renovation of its outlet shopping
centers.

                                       10


<PAGE>   11


                              HORIZON GROUP, INC.
         Management's Discussion and Analysis of Results of Operations
                      and Financial Condition (continued)
                   For the three months ended March 31, 1997
                                  (unaudited)


Adjusted Funds From Operations

The Company believes that Adjusted Funds From Operations before minority
interests is the primary indicator of the financial performance of the Company
and is influenced by both the operations of the properties and the capital
structure of the Company.  Adjusted Funds From Operations before minority
interests is defined as net income (computed in accordance with generally
accepted accounting principles) excluding (1) gains or losses from debt
restructuring, certain one-time charges and write downs and sales of property,
(2) depreciation of real estate, (3) amortization other than the amortization
of deferred financing costs and (4) adjustments for unconsolidated partnerships
and joint ventures (Funds From Operations as defined by the National
Association of Real Estate Trusts in March 1995), then further adjusted to (a)
eliminate the effect of straight-line rental income and rental expense and (b)
deduct normalized capital expenditures associated with leasing, tenant
improvements and non-revenue enhancing upkeep of properties.  Adjusted Funds
From Operations is the most significant factor considered by the Board of
Directors in determining the amount of cash distributions the Company will make
to shareholders.  Adjusted Funds From Operations does not represent cash flow
from operations as defined by generally accepted accounting principles and is
not necessarily indicative of cash available to fund all cash flow needs.
Adjusted Funds From Operations before minority interests and extraordinary
charge for the first quarter of 1997 decreased $5.5 million to $9.9 million, or
35.6% compared to 1996.  The decrease resulted principally from increased
interest and space lease expense not offset by increased revenues.


Other Information

The statements contained herein which are not historical facts are forward
looking statements based upon economic forecasts, budgets, and other factors
which, by their nature, involve known risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Horizon
Group, Inc. to be materially different from any future results implied by such
statements.  In particular, among the factors that could cause actual results
to differ materially are the following:  business conditions and general
economy; competitive factors; interest rates and other risks inherent in the
real estate business.  For further information on factors which could impact
the Company and the statements contained herein, reference is made to the
Company's other filings with the Securities and Exchange Commission.


                                       11


<PAGE>   12


                              HORIZON GROUP, INC.
                          Part II - Other Information




Exhibits and Reports on Form 8-K


    a)     Exhibit 10.1    Agreement with Jeffrey A. Kerr dated April 11, 1997

           Exhibit 10.2    Employment Agreement with James S. Wassel
                           dated April 24, 1997

           Exhibit 27      Financial Data Schedule (Edgar filing only)


    b)     On February 27, 1996, a Current Report on Form 8-K, dated
           February 26, 1996, was filed with respect to the 1996 financial
           results.

                                       12


<PAGE>   13


                                  SIGNATURES



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.




                                              HORIZON GROUP, INC.
                                              -------------------       
                                              Registrant






Date:   May 13, 1997                     By:  /s/ Richard Phillips
        ------------                          ---------------------------
                                         Richard Phillips, Vice President 
                                         and Principal Accounting Officer


                                       13

<PAGE>   14
                                EXHIBIT INDEX




<TABLE>
<CAPTION>
Exhibit
  No.                   Description                                             Page
-------                 -----------                                             ----
<S>                    <C>                                                      <C>

  10.1                  Agreement with Jeffrey A. Kerr dated April 11, 1997
                        
  10.2                  Employment Agreement with James S. Wassel dated 
                        April 24, 1997

  27                    Financial Data Schedule

</TABLE>