skirt for Action Figure

Well, you can always sculpt it, but if you specifically want cloth, it depends on exactly what you're trying to do (ie long or short, simple or badass, etc). For a short skirt, maybe try to get some denim, potentially from a pair of jeans you don't wear (if you've ever torn the rear out of a pair of jeans and havent tossed them yet, here's your chance!) or you could even check in a thrift shop and grab a pair of jeans for the price of what a bit of scrap would cost. For a longer skirt, a softer fabric would do better. Cotton, is best for typical, everyday, or lower class skirts (ie average modern character or fantasy-era peasant). Also for peasants, maybe a rougher fabric like burlap could work, or wool for a peasant in colder areas. For higher-class fantasy, a linen, satin, or silk would work, but of course those would be pricier. For a futuristic look, I'd say polyester or pleather (fake leather) would be your best bet (this also goes for short skirt unless it's not a sci-fi futuristic). Also a reflective fabric (not entirely sure what they're made of) could work for sci-fi futuristic.

Anyway, if you're dead set on leather, pleather is really the only alternative. Real leather is expensive, but you could possibly scrap some from say a purse at a secondhand shop (ie Goodwill, Salvation Army). Pleather is really easy to get, and if you can't find it loose, there will almost always be pleather pants in the women's/girls' departments at Wal-Mart to scrap.

As for where to look, all the scrap-from-clothing options are scattered above, but if Walmart isnt doing well for loose cloth, try Jo-Ann's, Michael's, AC Moore, or maybe even Hobby Lobby or Pat Catan's. I'm sure you probably have some local cloth stores with their own unique names.