Armorall do some decent leather wipes. I also have an old Escort MK1 and they brought the leather up a treat. I use them from time to time in my Z to keep her fresh and perky!
You could try a Powerflow dealer, as they make exhausts from scratch so can tune it to your requirements, and keep the standard tips.
If you live anywhere near Sheffield I know a place called exhaustsuk.com who can do a custom job. In Dorset there is Top Gear in Bridport, and just south of...
I had the same problem on mine. It turned out that the rubber trim had deteriorated, and it cost me over £200 for a new trim from BMW.
This is a common problem with softtop cars, but I must admit I expected better from BMW.