NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR:  DANIER LEATHER INC.

TSX SYMBOL:  DL

JANUARY 20, 2004 - 07:00 ET

Danier Leather Reports Results For Second Quarter Of
Fiscal 2004

TORONTO, ONTARIO--Danier Leather Inc. (TSX: DL) today announced 
its consolidated financial results for the second quarter and 26 
weeks ended December 27, 2003. 


/T/

HIGHLIGHTS ($000s, except earnings per share):

                      13 Weeks Ended            26 Weeks Ended
---------------------------------------------------------------------
              December 27, December 28,    December 27, December 28,
                      2003         2002            2003         2002
---------------------------------------------------------------------
Sales              $79,293      $86,615        $102,594     $109,310
---------------------------------------------------------------------
EBITDA(1)          $16,998      $21,657         $11,980      $17,804
---------------------------------------------------------------------
Net Earnings        $8,984      $11,777          $4,876       $8,405
---------------------------------------------------------------------
EPS Basic            $1.30        $1.70           $0.70        $1.22
---------------------------------------------------------------------
EPS Diluted          $1.29        $1.67           $0.70        $1.19
---------------------------------------------------------------------
Number of Stores(a)    102           95             102           95
---------------------------------------------------------------------
Square Footage(a)  383,726      354,250         383,726      354,250
---------------------------------------------------------------------
(a)At quarter-end.

/T/

HIGHLIGHTS 

- Results continue to be impacted by a difficult operating 
environment in specialty apparel  

- Opened one new mall store and one new power centre location 
during the quarter 

- Increased sales of higher-margin accessories by 10% to $14.3 
million or 18% of total sales 

"While gross margins remained relatively stable, store traffic 
and sales were weak, resulting in a very disappointing quarter," 
said Jeffrey Wortsman, President and CEO of Danier Leather. "A 
weak operating environment in specialty apparel and warmer 
weather leading up to the holidays negatively affected sales. In 
addition, greater consumer demand for shorter length outerwear 
resulted in a lower average sale per customer." 

Danier maintained a strong financial position at quarter-end with 
approximately $13.9 million in cash, no long-term debt and 
working capital of $42.9 million. Cash decreased by $5.6 million 
relative to last year mainly due to the timing settlement of 
credit card sales following Boxing Day, which this year fell on a 
Friday, thereby delaying bank settlement until the following 
Monday, subsequent to quarter-end. Cash balances of approximately 
$19 million in the week subsequent to quarter end were similar to 
the prior year. Inventory of $42.8 million was higher than last 
year's level of $38.8 million due to seven more stores in 
operation and lower than expected sales. Book value per share 
increased to $10.53 from $10.27 in the prior year. 

Revenue for the second quarter declined 8% to $79.3 million on a 
comparable store sales decline of 13%. EBITDA for the quarter was 
$17.0 million versus $21.7 million for the same period last year. 
Net earnings were $9.0 million or $1.30 per share ($1.29 
diluted), as compared with $11.8 million or $1.70 per share 
($1.67 diluted) for the same period last year. 

Revenue for the first half of fiscal 2004 fell 6% to $102.6 
million from $109.3 million in the prior year. Comparable store 
sales decreased 12%. The comparable sales decrease was offset to 
some degree by additional revenues from seven new stores. EBITDA 
decreased to $12.0 million from $17.8 million for the first half 
of fiscal 2003. Net earnings decreased to $4.9 million, or $0.70 
per share ($0.70 diluted), as compared with $8.4 million, or 
$1.22 per share ($1.19 diluted).  

The decrease in net earnings for the quarter and first half is 
mainly attributable to a decline in overall sales as well as 
higher selling, general and administrative (SG&A) expenses. SG&A 
increased by 5% to $43.4 million in the first half of fiscal 
2003. The increase is mainly due to higher advertising expenses 
as well as salaries, benefits and rent and occupancy costs 
associated with the operation of seven additional stores.  

Danier's innovative line of leather and suede accessories 
continued to perform well, with sales increasing 10% for both the 
quarter and year-to-date, and representing 18% of total sales for 
the quarter (19% year-to-date).  

Gross profit margin for the quarter was 52.7%, unchanged from the 
second quarter of 2003. Year-to-date gross margin fell 50 basis 
points to 50.6% compared with 51.1% for the first half of fiscal 
2003. Gross profit was negatively affected by realized losses of 
$0.5 million ($0.8 million year-to-date) on U.S. dollar foreign 
exchange forward contracts that were entered into in April 2003 
and that matured between July and December 2003. There are no 
further outstanding foreign exchange forward contracts.  

Danier opened two new stores in the second quarter - a mall store 
in Anjou, Quebec and a power centre in Hull, Quebec. No further 
store openings are planned for fiscal 2004.  

"We continue to make enhancements in many areas of the business, 
and are confident that in time they will contribute to improved 
financial performance," added Mr. Wortsman. "Our focus remains on 
superior execution, particularly in the areas of marketing and 
merchandising. Danier's financial strength and vertical 
integration remain key competitive advantages and, together with 
our strong brand and reputation, will allow us to emerge from the 
current environment a much stronger company."  

About Danier 

Danier Leather Inc. is a leading integrated designer, 
manufacturer, and retailer of high-quality leather and suede 
clothing and accessories. The Company's merchandise is marketed 
exclusively under the well-known Danier brand name and is 
available only at its 102 shopping mall, street-front, and power 
centre stores, or through its corporate sales division and online 
through its website, www.danier.com. 

(1)EBITDA refers to earnings before interest expense, income tax, 
depreciation and amortization, and is a measure used by 
management to assess operating performance. EBITDA is a non-GAAP 
earnings measure and does not have a standardized meaning. It is 
therefore unlikely to be comparable to similar measures presented 
by other issuers. 

Note: This press release may contain forward-looking statements 
that involve risks, estimates, and uncertainties. Therefore, 
actual results may differ materially. Examples of such risks and 
uncertainties include those associated with product sales, demand 
for Danier's products, availability of raw materials, foreign 
sourcing and manufacturing, continued growth of the leather 
apparel industry, and competition and other associated risks with 
Danier's business. For an expanded discussion of such risks and 
uncertainties, please see the documents filed by Danier Leather 
Inc. with the Ontario Securities Commission and the Toronto Stock 
Exchange. Danier disclaims any responsibility to update or revise 
such forward-looking statements whether as a result of new 
information, future events or otherwise. 

Investors, analysts and the media are invited to participate in a 
conference call today at 9:00 AM Eastern Time to discuss the 
results. Please dial 416-695-9720 in the Toronto area or 
1-888-280-8349 (rest of Canada and the U.S.) and quote the Danier 
Leather Inc. conference call with chairperson Jeffrey Wortsman at 
least five minutes prior to the call. The call will also be 
webcast at www.danier.com or at www.ccnmatthews.com.  


/T/

DANIER LEATHER INC.
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
(thousands of dollars, except earnings per share and number of shares
 outstanding)
---------------------------------------------------------------------
                      For the 13 Weeks Ended   For the 26 Weeks Ended
                        December    December    December     December
                        27, 2003    28, 2002    27, 2003     28, 2002
                      (unaudited) (unaudited) (unaudited) (unaudited)

Revenue                 $ 79,293    $ 86,615   $ 102,594    $ 109,310
Cost of sales             37,499      40,927      50,695       53,480
                      ----------------------  -----------------------
Gross profit              41,794      45,688      51,899       55,830
Selling, general and
 administrative expenses  26,549      25,763      43,425       41,490
                      ----------------------  -----------------------
Earnings before interest
 and income taxes         15,245      19,925       8,474       14,340
Interest expense             135         131         211          213
                      ----------------------  -----------------------
Earnings before income
 taxes                    15,110      19,794       8,263       14,127
Provision for income tax
 (Note 6)                  6,126       8,017       3,387        5,722
                      ----------------------  -----------------------
Net earnings for the
 period                 $  8,984    $ 11,777   $   4,876    $   8,405
                      ----------------------  -----------------------
                      ----------------------  -----------------------

Retained earnings,
 beginning of period      39,891      35,233      43,999       38,605
                      ----------------------  -----------------------
Retained earnings, end of
 period                 $ 48,875    $ 47,010   $  48,875    $  47,010
                      ----------------------  -----------------------
                      ----------------------  -----------------------

Earnings per Share:
 Basic                  $   1.30    $   1.70   $    0.70    $    1.22
 Diluted                $   1.29    $   1.67   $    0.70    $    1.19

Weighted Average Number
 of Shares Outstanding:
Basic                   6,919,554  6,910,253   6,919,554    6,909,403
Diluted                 6,984,547  7,070,805   6,984,473    7,092,768
Number of Shares
 Outstanding            6,919,554  6,911,354   6,919,554    6,911,354


                                              For the 12 Months Ended
                                             ------------------------
                                               December      December
                                               27, 2003      28, 2002
                                             ------------------------
                                             (unaudited)  (unaudited)

Revenue                                       $ 168,771     $ 181,643
Cost of sales                                    86,003        90,831
                                             ------------------------
Gross profit                                     82,768        90,812
Selling, general and
 administrative expenses                         79,325        73,665
                                             ------------------------
Earnings before interest
 and income taxes                                 3,443        17,147
Interest expense                                     64           193
                                             ------------------------
Earnings before income
 taxes                                            3,379        16,954
Provision for income tax
 (Note 6)                                         1,514         6,867
                                             ------------------------
Net earnings for the
 period                                       $   1,865      $ 10,087
                                             ------------------------
                                             ------------------------

Retained earnings,
 beginning of period                             47,010        36,923
                                             ------------------------
Retained earnings, end of
 period                                       $  48,875      $ 47,010
                                             ------------------------
                                             ------------------------

Earnings per Share:
 Basic                                        $    0.27         $1.47
 Diluted                                      $    0.27         $1.42

Weighted Average Number of Shares Outstanding:
 Basic                                          6,918,712    6,885,249
 Diluted                                        6,998,718    7,101,944
Number of Shares
 Outstanding                                   6,919,554    6,911,354



DANIER LEATHER INC.
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
---------------------------------------------------------------------

                                    December     December        June
                                    27, 2003     28, 2002    28, 2003
                                  -----------  -----------  ---------
                                  (unaudited)  (unaudited)
ASSETS
Current Assets
  Cash                               $13,871      $19,473      $7,254
  Accounts receivable                  6,662        2,623         600
  Income taxes recoverable                 -            -          83
  Inventories (Note 3)                42,750       38,836      37,029
  Prepaid expenses                       567          700         889
  Current portion of future
  income tax asset                     1,098          688       1,044
                                  -----------  -----------  ---------
                                      64,948       62,320      46,899

Other Assets
  Capital assets (Note 4)             32,707       34,129      34,246
  Goodwill                               342          342         342
                                  -----------  -----------  ---------
                                     $97,997      $96,791     $81,487
                                  -----------  -----------  ---------
                                  -----------  -----------  ---------

LIABILITIES
Current Liabilities
 Accounts payable and accrued
  liabilities                        $20,694      $21,024     $10,559
 Income taxes payable                  1,319        2,012           -
                                  -----------  -----------  ---------
                                      22,013       23,036      10,559
Deferred lease inducements             2,418        2,022       2,238
Future income tax liability              696          784         696
                                  -----------  -----------  ---------
                                      25,127       25,842      13,493
                                  -----------  -----------  ---------

SHAREHOLDERS' EQUITY
  Share capital (Note 5)              23,995       23,939      23,995
  Retained earnings                   48,875       47,010      43,999
                                  -----------  -----------  ---------
                                      72,870       70,949      67,994
                                  -----------  -----------  ---------
                                     $97,997      $96,791     $81,487
                                  -----------  -----------  ---------
                                  -----------  -----------  ---------



DANIER LEATHER INC.
CONSOLIDATED CASH FLOW STATEMENTS
(thousands of dollars)


                      For the 13 Weeks Ended   For the 26 Weeks Ended
                      ----------------------   ----------------------
                        December    December    December     December
                         27,2003     28,2002     27,2003      28,2002
                      (unaudited) (unaudited) (unaudited) (unaudited)
                      ----------------------   ----------------------
Operating activities
  Net earnings for
 the period               $8,984     $11,777      $4,876       $8,405
  Items not affecting cash:
  Amortization             1,753       1,732       3,506        3,464
Amortization of deferred lease
 inducements                (94)        (70)       (184)        (134)
  Future income taxes       (47)        (18)        (54)         (60)
                      -----------------------------------------------
                          10,596      13,421       8,144       11,675
Change in non-cash working
 capital items (Note 7)   24,716      28,467          76       10,074
                      ----------------------   ----------------------
Cash flows from operating
 activities               35,312      41,888       8,220       21,749
                      ----------------------   ----------------------
                      ----------------------   ----------------------

Financing activities
Issuance of subordinate voting
 shares                        -          12           -           22
Proceeds from lease
 inducements                 251         126         364          319
                      ----------------------   ----------------------
Cash flows from financing
 activities                  251         138         364          341
                      ----------------------   ----------------------

Investing activities
Acquisition of capital
 assets                    (924)     (3,239)     (1,967)      (6,394)
                      ----------------------   ----------------------
Cash flows from investing
 activities                (924)     (3,239)     (1,967)      (6,394)
                      ----------------------   ----------------------

Increase in cash          34,639      38,787       6,617       15,696
Cash and bank overdraft,
 beginning of period    (20,768)    (19,314)       7,254        3,777
                      ----------------------   ----------------------
Cash, end of period      $13,871     $19,473     $13,871      $19,473
                      ----------------------   ----------------------
                      ----------------------   ----------------------

Supplementary cash flow
 information:
  Interest paid              160         152         218          212
  Income taxes paid          996       1,673       2,033        3,990

/T/

1. SIGNIFICANT ACCOUNTING POLICIES: 

Basis of Presentation: 

The interim financial statements presented herein follow the same 
accounting policies and their methods of application as the 2003 
annual financial statements. Generally accepted accounting 
principles for interim financial statements do not conform in all 
respects to the disclosures required for annual financial 
statements, and accordingly, these interim financial statements 
should be read in conjunction with the Company's audited 
consolidated financial statements and the accompanying notes 
contained in the Company's 2003 Annual Report. 

2. SEASONALITY OF RETAIL OPERATIONS: 

Due to the seasonal nature of the retail business and the 
Company's product lines, the results of operations for any 
interim period are not necessarily indicative of the results of 
operations to be expected for the fiscal year. Generally, a 
significant portion of the Company's sales and earnings are 
generated during the fiscal second quarter, which includes the 
holiday selling season. Sales are generally lowest and losses are 
experienced during the period from April to September. 

3. INVENTORY (thousands of dollars): 


/T/

                         December          December              June
                         27, 2003          28, 2002          28, 2003
                         --------          --------          --------
Raw materials             $ 5,531           $ 4,327           $ 4,970
Work-in-process             1,918             2,122             2,228
Finished goods             35,301            32,387            29,831
                         --------          --------          --------
                         $ 42,750          $ 38,836          $ 37,029
                         --------          --------          --------
                         --------          --------          --------


4. CAPITAL ASSETS (thousands of dollars):

                                                    December 27, 2003
                                  -----------------------------------
                                             Accumulated     Net Book
                                     Cost   Amortization        Value
                                  -----------------------------------
Land                              $ 1,000            $ -       $1,000
Building                            7,035          1,058        5,977
Leasehold improvements             27,862         11,447       16,415
Furniture and equipment            12,298          6,728        5,570
Computer hardware and software      9,397          5,652        3,745
                                  -----------------------------------
                                  $57,592        $24,885      $32,707
                                  -----------------------------------
                                  -----------------------------------


                                                    December 28, 2002
                                  -----------------------------------
                                             Accumulated     Net Book
                                     Cost   Amortization        Value
                                  -----------------------------------

Land                              $ 1,000             $ -     $ 1,000
Building                            6,785             798       5,987
Leasehold improvements             25,436           9,639      15,797
Furniture and equipment            12,138           6,205       5,933
Computer hardware and software      9,987           4,575       5,412
                                  -----------------------------------
                                  $55,346        $ 21,217    $ 34,129
                                  -----------------------------------
                                  -----------------------------------


                                                        June 28, 2003
                                  -----------------------------------
                                             Accumulated     Net Book
                                     Cost   Amortization        Value
                                  -----------------------------------
Land                              $ 1,000            $ -      $ 1,000
Building                            6,988            832        6,156
Leasehold improvements             26,492          9,899       16,593
Furniture and equipment            11,918          6,029        5,889
Computer hardware and software      9,225          4,617        4,608
                                  -----------------------------------
                                 $ 55,623       $ 21,377     $ 34,246
                                  -----------------------------------
                                  -----------------------------------

/T/

5. SHARE CAPITAL (thousands of dollars, except number of shares 
and per share amounts): 

(a) Authorized: 


/T/

1,224,329 Multiple Voting Shares
Unlimited Subordinate Voting Shares
Unlimited Class A Preference Shares

(b) Issued:

                                     Dec 27,     Dec 28,     June 28,
                                       2003        2002         2003
                                     ------      ------      --------
1,224,329 Multiple Voting Shares
 (December 28, 2002 and
 June 28, 2003 - 1,224,329)             (i)         (i)           (i)
5,695,225 Subordinate Voting Shares
 (December 28, 2002 - 5,687,025 and
 June 28, 2003 - 5,695,225)          23,995      23,939        23,995
                                     ------      ------      --------
                                   $ 23,995    $ 23,939      $ 23,995
                                     ------      ------      --------
(i) Nominal

/T/

(c) Normal Course Issuer Bid: 

During the 26 weeks ended December 27, 2003 and 26 weeks ended 
December 28, 2002, there were no shares repurchased under the 
Normal Course Issuer Bid. 

(d) Stock-Based Compensation Plan: 

The Company has reserved 1,025,000 Subordinate Voting Shares for 
issuance under its Stock Option Plan. As at December 27, 2003, 
there were 774,400 options outstanding with exercise prices 
ranging from $6.02 to $17.94. Of these outstanding options, 
579,900 are exercisable. Further details of the Stock Option Plan 
are contained in Note 6(e) of the consolidated financial 
statements contained in the 2003 Annual Report. 

The Company uses settlement accounting to account for its stock 
option plan. Consideration paid by employees and directors, which 
represents the exercise price on the exercise of stock options, 
is recorded as share capital. 

During the 26 weeks ended December 27, 2003, the Company granted 
44,000 stock options with an exercise price of $10.96 which 
represented the market price of the stock. Had compensation cost 
been determined using the fair value-based method at the grant 
date of the stock options awarded to employees and directors, the 
net earnings and earnings per share would have been reduced to 
the pro forma amounts indicated in the following table: 


/T/

                                   13 Weeks Ended      13 Weeks Ended
                                December 27, 2003   December 28, 2002
                           ----------------------   -----------------
                                As                     As
                           Reported  Pro forma    Reported  Pro forma
                           --------- ---------    --------  ---------
Net earnings                  $8,984    $8,839     $11,777    $11,620
Basic earnings per share       $1.30     $1.28       $1.70      $1.68
Diluted earnings per share     $1.29     $1.27       $1.67      $1.64



                                 26 Weeks Ended        26 Weeks Ended
                              December 27, 2003     December 28, 2002
                           ----------------------   -----------------
                                As                     As
                           Reported  Pro forma    Reported  Pro forma
                           --------- ---------    --------  ---------
Net earnings                  $4,876    $4,586      $8,405     $8,121
Basic earnings per share       $0.70     $0.66       $1.22      $1.18
Diluted earnings per share     $0.70     $0.66       $1.19      $1.14

/T/

To determine compensation cost, the fair value of stock options 
is recognized on a straight-line basis over the vesting period of 
the options. 

The pro forma effect on net income of the period is not 
representative of the pro forma effect on net income of future 
periods because it does not take into consideration the pro forma 
compensation cost related to options awarded prior to June 29, 
2002. 

The fair value of options granted was estimated on the grant date 
using the Black-Scholes option-pricing model with the following 
assumptions for the stock options granted since the beginning of 
the year: 


/T/

          Expected dividend yield                                None
          Expected volatility                                     54%
          Risk-free interest rate                               4.50%
          Expected life                                      10 years

/T/

The weighted average fair value of stock options granted during 
the 26 weeks ended December 27, 2003 was $7.54. 

The Black-Scholes option-pricing model was developed for use in 
estimating the fair value of traded options, which have no 
vesting restrictions and are fully transferable. In addition, the 
Black-Scholes model requires the use of subjective assumptions 
including the expected stock price volatility. Because the 
Company's stock option plan has characteristics different from 
those of traded options, and because changes in the subjective 
assumptions can have a material effect on the fair value 
estimate, the Black-Scholes option-pricing model does not 
necessarily provide a reliable single measure of the fair value 
of options granted. 

6. INCOME TAXES: 

The Company's estimated effective income tax rate consists of the 
following: 


/T/

                                      December 27,       December 28,
                                             2003               2002
                                      ------------       ------------
Combined basic federal and provincial
 average statutory rate                      37.0%              39.0%
Manufacturing and processing credit          (0.9%)            (1.0%)
Effect of foreign operating
 losses                                       3.9%               2.0%
Other                                         1.0%               0.5%
                                      ------------       ------------
                                             41.0%              40.5%
                                      ------------       ------------


7. CHANGES IN NON-CASH WORKING CAPITAL ITEMS (thousands of dollars):

                                    13 weeks ended     26 weeks ended
                                ------------------ ------------------
                                  Dec 27,   Dec 28,  Dec 27,  Dec 28,
                                    2003      2002     2003      2002
                                ------------------ ------------------
Accounts receivable             ($6,072)  ($2,031) ($6,062)  ($2,139)
Inventories                       14,706    13,497  (5,721)     (174)
Prepaid expenses                     246       156      322      (97)
Accounts payable and accrued
 liabilities                      10,665    10,479   10,135    10,552
Income taxes payable               5,171     6,366    1,402     1,932
                                ------------------ ------------------
                                 $24,716   $28,467      $76   $10,074
                                ------------------ ------------------

/T/

8. COMMITMENTS & CONTINGENCIES (thousands of dollars): 

(a) Legal Proceedings 

In the course of its business, the Company from time to time 
becomes involved in various claims and legal proceedings. In 
fiscal 1999, the Company and certain of its directors and 
officers were served with a Statement of Claim under the Class 
Proceedings Act (Ontario). The Claim relates to subordinate 
voting shares purchased at the time of the Company's initial 
public offering in May 1998. Essentially, the suit seeks damages 
be paid equal to the alleged diminution in value of the shares. 
The plaintiff also brought a motion to certify the action as a 
class action on behalf of investors who purchased shares pursuant 
to the initial public offering. A motion to certify the action as 
a class action was heard in July, 2001, and in October, 2001, the 
motion for certification was granted. The trial commenced in May 
2003 and is expected to be completed in January 2004. It is 
expected that the Judge will take some time to write Reasons for 
Judgment and render his determination. No amounts have been 
provided in the accounts of the Company in respect of any of the 
amounts being claimed in this matter. The Company strongly 
believes the suit is wholly without merit and continues to 
vigorously defend it. In that regard, the Company has a provision 
of $300 for future legal and professional fees in defense of this 
action. 

(b) Operating Leases 

Minimum rentals for the next five years and thereafter, excluding 
rentals based upon revenue are as follows: 


/T/

      2004                                    $ 11,738
      2005                                    $ 10,745
      2006                                    $ 10,075
      2007                                    $  9,235
      2008                                    $  7,291
      Thereafter                              $ 15,128

/T/

(a) Letters of Credit 

The Company had outstanding letters of credit in the amount of 
$6,450 (December 28, 2002 - $7,934; June 28, 2003 - $7,237) for 
imports of finished goods inventories to be received. 

9. SEGMENTED INFORMATION: 

Management has determined that the Company operates in one 
dominant industry and geographic segment which involves the 
design, manufacture and retail of fashion leather and suede 
apparel and accessories. 

FOR FURTHER INFORMATION PLEASE CONTACT:
Danier Leather Inc.
Investor Relations Contact: Jeffrey Wortsman
President and Chief Executive Officer
(416) 762-8175 ext. 302
(416) 762-7408 (FAX)
Email: leather@danier.com

or

Danier Leather Inc.
Investor Relations Contact: Bryan Tatoff
Senior Vice-President and Chief Financial Offic
(416) 762-8175 ext. 328
(416) 762-7408 (FAX)
Email: bryan@danier.com