<PAGE>

                                  UNITED STATES
                       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 28, 2000

                                       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 000-21543


                        WILSONS THE LEATHER EXPERTS INC.
                        --------------------------------
             (Exact name of registrant as specified in its charter)

                 MINNESOTA                                41-1839933
                 ---------                                ----------
      (State or other jurisdiction of                  (I.R.S. Employer
       incorporation or organization)                 Identification No.)

             7401 BOONE AVE. N.
              BROOKLYN PARK, MN                             55428
              -----------------                             -----
  (Address of principal executive offices)                (Zip Code)

                                 (763) 391-4000
                                 --------------
              (Registrant's telephone number, including area code)



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 [ ]

As of December 4, 2000, there were 16,836,505 shares of common stock, $0.01 par
value per share, outstanding.

                                       1
<PAGE>

                        WILSONS THE LEATHER EXPERTS INC.
                                     INDEX

                                                                          PAGE
                                                                          ----
PART I - FINANCIAL INFORMATION

     Item 1. Consolidated Financial Statements

             Consolidated Balance Sheets as of October 28, 2000,
             January 29, 2000 and October 30, 1999                          3

             Consolidated Statements of Operations for the
             three months ended October 28, 2000 and October 30, 1999       4

             Consolidated Statements of Operations for the
             nine months ended October 28, 2000 and October 30, 1999        5

             Consolidated Statements of Cash Flows for the
             nine months ended October 28, 2000 and October 30, 1999        6

             Notes to Consolidated Financial Statements                     7

     Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations                           10

     Item 3. Quantitative and Qualitative Disclosures About Market Risk    14


PART II - OTHER INFORMATION

     Item 2. Changes in Securities                                         16

     Item 6. Exhibits and Reports on Form 8-K                              16

     Signature                                                             19

     Index to Exhibits                                                     20

                                       2
<PAGE>

                WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                          OCTOBER 28, JANUARY 29,  OCTOBER 30,
                      ASSETS                                 2000        2000 *        1999
                      ------                              ----------- -----------  -----------
                                                          (Unaudited)              (Unaudited)
<S>                                                        <C>         <C>          <C>
CURRENT ASSETS:
   Cash and cash equivalents                               $     651   $ 124,926    $      --
   Accounts receivable, net                                   13,425       7,547        7,560
   Inventories                                               200,318      79,221      158,938
   Prepaid expenses                                            3,543       8,477        8,863
   Other current assets                                        2,094         663        3,614
                                                           ---------   ---------    ---------
       Total current assets                                  220,031     220,834      178,975

Property and equipment, net                                   64,365      49,587       46,616
Other assets, net                                              1,456       2,133        2,582
                                                           ---------   ---------    ---------
       Total assets                                        $ 285,852   $ 272,554    $ 228,173
                                                           =========   =========    =========

        LIABILITIES AND SHAREHOLDERS' EQUITY
        ------------------------------------

CURRENT LIABILITIES:
   Accounts payable                                        $  20,548   $  10,912    $  25,249
   Notes payable                                              81,570          --       39,130
   Accrued expenses                                           34,556      47,722       32,419
   Income taxes payable                                           --      35,345           --
   Deferred income taxes                                          --          --        5,314
                                                           ---------   ---------    ---------
       Total current liabilities                             136,674      93,979      102,112

Long-term debt                                                30,590      43,890       43,890
Other long-term liabilities                                    4,101       3,478        3,004
                                                           ---------   ---------    ---------
       Total liabilities                                     171,365     141,347      149,006
                                                           ---------   ---------    ---------

Commitments and contingencies

SHAREHOLDERS' EQUITY:
   Common stock, $.01 par value; 150,000,000 shares
     authorized, 16,808,805, 16,585,234 and 16,556,625
     shares issued and outstanding on October 28, 2000,
     January 29, 2000 and October 30, 1999, respectively         168         166          166
   Additional paid-in capital                                 59,828      57,485       57,248
   Retained earnings                                          54,439      73,582       21,784
   Accumulated other comprehensive income (loss)                  52         (26)         (31)
                                                           ---------   ---------    ---------
       Total shareholders' equity                            114,487     131,207       79,167
                                                           ---------   ---------    ---------
       Total liabilities and shareholders' equity          $ 285,852   $ 272,554    $ 228,173
                                                           =========   =========    =========
</TABLE>

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

           * - Derived from audited consolidated financial statements.

                                       3
<PAGE>

                WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

                                                           THREE MONTHS ENDED
                                                        -----------------------
                                                        OCTOBER 28,  OCTOBER 30,
                                                           2000          1999
                                                        ----------   ----------

NET SALES                                                $ 108,592    $  97,663

COSTS AND EXPENSES:
     Cost of goods sold, buying and occupancy costs         71,770       64,692
     Selling, general and administrative expenses           36,033       32,699
     Depreciation and amortization                           2,701        1,727
                                                         ---------    ---------
         Loss from operations                               (1,912)      (1,455)
     Interest expense, net                                   2,029        1,849
                                                         ---------    ---------
         Loss before income taxes                           (3,941)      (3,304)
     Income tax benefit                                     (1,577)      (1,288)
                                                         ---------    ---------
         Loss before extraordinary item                     (2,364)      (2,016)
     Extraordinary loss on early extinguishment
       of debt, net of tax of $78                               --         (119)
                                                         ---------    ---------
         Net loss                                        $  (2,364)   $  (2,135)
                                                         =========    =========

NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
     Loss before extraordinary item                      $   (0.14)   $   (0.12)
     Extraordinary loss on early extinguishment
       of debt, net of tax                                      --        (0.01)
                                                         ---------    ---------
     Net loss per common share - basic and diluted       $   (0.14)   $   (0.13)
                                                         =========    =========

Weighted average common shares
    outstanding - basic and diluted                         16,768       16,492
                                                         =========    =========


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

                                       4
<PAGE>

                WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              NINE MONTHS ENDED
                                                           -----------------------
                                                           OCTOBER 28,  OCTOBER 30,
                                                              2000         1999
                                                           ----------   ----------
<S>                                                         <C>          <C>
NET SALES                                                   $ 255,451    $ 226,273

COSTS AND EXPENSES:
     Cost of goods sold, buying and occupancy costs           181,597      167,182
     Selling, general and administrative expenses              95,587       81,183
     Depreciation and amortization                              7,097        4,716
                                                            ---------    ---------
         Loss from operations                                 (28,830)     (26,808)
     Interest expense, net                                      2,040        4,052
                                                            ---------    ---------
         Loss before income taxes                             (30,870)     (30,860)
     Income tax benefit                                       (12,349)     (12,120)
                                                            ---------    ---------
         Loss before extraordinary item and cumulative
           effect of change in accounting principle           (18,521)     (18,740)
     Extraordinary loss on early extinguishment
       of debt, net of tax of $410 and $626, respectively        (623)        (958)
     Cumulative effect of change in accounting
       principle, net of tax of $950 (Note 2)                      --       (1,449)
                                                            ---------    ---------
         Net loss                                           $ (19,144)   $ (21,147)
                                                            =========    =========

NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
     Loss before extraordinary item and cumulative
         effect of change in accounting principle           $   (1.11)   $   (1.15)
     Extraordinary loss on early extinguishment
         of debt, net of tax                                    (0.04)       (0.05)
     Cumulative effect of change in accounting
         principle, net of tax                                     --        (0.09)
                                                            ---------    ---------
     Net loss per common share - basic and diluted          $   (1.15)   $   (1.29)
                                                            =========    =========

Weighted average common shares
    outstanding - basic and diluted                            16,707       16,354
                                                            =========    =========
</TABLE>

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

                                       5
<PAGE>

                WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                           ------------------------
                                                           OCTOBER 28,   OCTOBER 30,
                                                              2000          1999
                                                           ----------    ----------
<S>                                                         <C>          <C>
OPERATING ACTIVITIES:
    Net loss                                                $ (19,144)   $ (21,147)
    Adjustments to reconcile net loss to net cash used in
      operating activities-
      Extraordinary loss on early extinguishment of debt          623          958
      Depreciation and amortization                             7,095        4,716
      Amortization of deferred financing costs                    310          605
      Loss on disposal of assets                                 (361)         534
      Deferred income taxes                                    (1,156)         611
      Changes in operating assets and liabilities:
          Accounts receivable, net                             (5,878)      (1,236)
          Inventories                                        (121,096)     (73,967)
          Prepaid expenses                                      4,934       (2,730)
          Accounts payable and accrued expenses                (3,168)      10,657
          Income taxes payable and other liabilities          (33,814)     (25,373)
                                                            ---------    ---------
              Net cash used in operating activities          (171,655)    (106,372)
                                                            ---------    ---------

INVESTING ACTIVITIES:
      Additions to property and equipment, net                (21,849)     (16,224)

FINANCING ACTIVITIES:
      Change in notes payable                                  81,570       39,130
      Proceeds from issuance of common stock, net               1,572        1,978
      Repayment of long-term debt                             (13,300)     (26,110)
      Other Financing                                            (613)        (637)
                                                            ---------    ---------
          Net cash used in financing activities                69,229       14,361
                                                            ---------    ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS                    (124,275)    (108,235)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                124,926      108,235
                                                            ---------    ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                    $     651    $      --
                                                            =========    =========

SUPPLEMENTAL CASH FLOW INFORMATION:
      Cash paid during the period for-
          Interest                                          $   5,197    $   7,151
                                                            =========    =========
          Income taxes                                      $  22,196    $  11,896
                                                            =========    =========
</TABLE>

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

                                       6
<PAGE>

                WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.       NATURE OF ORGANIZATION

         Wilsons The Leather Experts Inc. (Wilsons Leather or the Company),
incorporated in Minnesota in 1996, is the leading specialty retailer of men's
and women's leather apparel and accessories in the United States. As of October
28, 2000, the Company operated 571 retail stores located in 44 states, Canada
and England, including 470 mall stores, 72 outlet stores and 29 airport
locations. The Company's mall stores offer a full range of its leather
merchandise while the less seasonal outlet and airport stores offer a higher mix
of accessories. The Company, which regularly supplements its permanent mall
stores with temporary holiday stores during its peak selling season from October
through December, operated 249 holiday stores in 1999 and plans to operate
approximately 240 in 2000.

2.       BASIS OF FINANCIAL STATEMENT PRESENTATION

         The consolidated financial statements include all accounts of Wilsons
Leather(TM) and its wholly owned subsidiaries. All material intercompany
balances and transactions between the entities have been eliminated in
consolidation.

         The accompanying unaudited financial statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules and
regulations. Although management believes that the accompanying disclosures are
adequate to make the information presented not misleading, it is recommended
that these interim financial statements be read in conjunction with the
Company's most recent audited financial statements and related notes included in
its 1999 Annual Report on Form 10-K. In the opinion of management, all
adjustments (which include normal recurring adjustments) necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim periods presented have been made. The Company's business is highly
seasonal, and accordingly, interim operating results are not necessarily
indicative of the results that may be expected for the full fiscal year.

Change in Accounting Method - Layaway Sales

         Effective January 31, 1999, the Company changed its method of
accounting for layaway sales in accordance with Staff Accounting Bulletin (SAB)
No. 101, "Revenue Recognition in Financial Statements." SAB No. 101 was released
in December 1999. Historically, the Company recognized revenue from layaway
sales in full upon the initial customer down payment. Under the new accounting
method adopted retroactive to January 31, 1999, the Company now recognizes
layaway sales in full upon final payment and delivery of merchandise to the
customer. The Company recorded an after-tax charge of $1.4 million in the first
quarter of 1999, for the cumulative effect of this change in accounting
principle. The effect of the change for the nine months ended October 30, 1999
was to increase loss before extraordinary item and cumulative effect of change
in accounting principle by $3.9 million ($0.24 per diluted common share).

                                       7
<PAGE>

3.       INVENTORIES

         Inventories, principally finished goods, consist of merchandise
purchased from domestic and foreign vendors and are carried at the lower of cost
or market value, determined by the retail inventory method on the last-in,
first-out (LIFO) basis. Quarterly inventory determinations under LIFO are
partially based on assumptions as to inventory levels at the end of the fiscal
year, sales and the projected rate of inflation for the year. The difference in
inventories between LIFO and the first-in, first-out method was not material as
of October 28, 2000 and October 30, 1999.

4.       EXTRAORDINARY LOSS

         The Company repurchased $13.3 million of its 11-1/4% Senior Notes due
2004 (Senior Notes) during the nine months ended October 28, 2000. The Company
incurred an extraordinary loss, net of tax of $0.4 million, of approximately
$0.6 million for the early extinguishment of debt. The Company repurchased $26.1
million of its Senior Notes during the nine months ended October 30, 1999. The
Company incurred an extraordinary loss, net of tax of $0.6 million, of
approximately $1.0 million for early extinguishment of debt.

5.       NET LOSS PER SHARE

         Basic loss per share is computed by dividing the net loss available to
common shareholders by the weighted average number of common shares outstanding
during the period. Diluted loss per share is computed using the treasury stock
method and is calculated to compute the dilutive effect of potential common
shares. A reconciliation of these amounts (in thousands, except per share
amounts) is as follows:

<TABLE>
<CAPTION>
                                       Three Months        Three Months        Nine Months        Nine Months
                                           Ended               Ended              Ended              Ended
                                     October 28, 2000    October 30, 1999   October 28, 2000   October 30, 1999
                                     ----------------    ----------------   ----------------   ----------------
<S>                                       <C>                <C>                <C>                <C>
Net loss                                  $ (2,364)          $ (2,135)          $(19,144)          $(21,147)
                                          ========           ========           ========           ========

Weighted average common shares
  outstanding - basic                       16,768             16,492             16,707             16,354

Dilutive potential common shares                --                 --                 --                 --
                                          --------           --------           --------           --------
Weighted average common shares
  outstanding - basic and
  diluted                                   16,768             16,492             16,707             16,354
                                          ========           ========           ========           ========

Basic and diluted net loss per
  common share                            $   (.14)          $   (.13)          $  (1.15)          $  (1.29)
                                          ========           ========           ========           ========
</TABLE>

                                       8
<PAGE>

6.       STOCK SPLIT

         Share and per share amounts in the consolidated financial statements
and related footnotes have been adjusted to reflect the three-for-two stock
split effected March 15, 2000.

7.       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities," as amended becomes effective
for the years beginning after June 15, 2000. SFAS No. 133 establishes accounting
and reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allows a derivative's gains or losses to offset related
results on the hedged item in the income statement and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. The adoption of SFAS No. 133 is not expected to
have a material effect on the Company's financial position or results of
operations.

8.       SUBSEQUENT EVENTS

         On October 31, 2000, the Company acquired El Portal Group, Inc. ("El
Portal") by merging a newly formed subsidiary with and into El Portal. The
acquisition price, excluding assumed debt, was approximately $16.9 million. The
acquisition was funded with cash from the Company's Senior Credit Facility. It
will be accounted for under the purchase method with the purchase price
allocated to the acquired assets and assumed liabilities based on fair market
value.

         On October 31, 2000, the Company amended its Senior Credit Facility
with General Electric Capital Corporation and its other lenders. The amendment
increased the maximum amount available for borrowings from $125 million to $165
million in aggregate principal amount, which includes a letter of credit
subfacility of up to $85 million. The Company also added a $20 million seasonal
over-advance for November 2000 only with interest on the over-advance at 100
basis points over the Senior Credit Facility interest rate.

         The maximum amount available under the Senior Credit Facility remained
limited to 60% of net inventories (65% during the months of September and
October plus a $7.5 million seasonal over-advance), and interest payable on
borrowings remained at one or more variable rates determined by LIBOR plus
1.25%, commercial paper rate plus 1.25% or "prime". The spreads are subject to
increase based on the Company's financial results. No significant changes were
made to the Senior Credit Facility covenants. The Senior Credit Facility, as
amended, expires in May 2002.

9.       RECLASSIFICATION

         Certain reclassifications have been made to the 1999 consolidated
financial statements to conform to the 2000 presentation.

                                       9
<PAGE>

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

         The following discussion of the financial condition and results of
operations of Wilsons The Leather Experts Inc. and its wholly owned subsidiaries
(Wilsons Leather or the Company) should be read in conjunction with the
Company's most recent audited financial statements and related notes included in
its 1999 Annual Report on Form 10-K.

OVERVIEW

         Wilsons Leather(TM) is the leading specialty retailer of leather
apparel and accessories in the United States. As of October 28, 2000, the
Company operated 571 retail stores in 44 states, Canada and England, including
470 mall stores, 72 outlet stores and 29 airport locations. The Company, which
regularly supplements its permanent mall stores with temporary holiday stores
during its peak selling season from October through December, plans to operate
approximately 240 in 2000. Over 90% of the Company's merchandise is designed and
sold under Wilsons Leather's proprietary labels, including M. Julian(R),
Maxima(R), Pelle Studio(R) and Wilsons Leather(TM), with each label designed to
appeal to identified customer lifestyle segments. Wilsons Leather's mall stores
average approximately 2,100 square feet and feature merchandise tailored to the
demographics and buying patterns of each store's local customer base.

         The Company's business is highly seasonal; therefore, the operating
results for the interim periods described below are not necessarily indicative
of the results that may be expected for a full fiscal year. A majority of the
Company's net sales and operating profit is generated in the peak selling season
from October through December, which includes the holiday selling season.
Wilsons Leather recorded 55.8% of its sales for the fiscal year ended January
29, 2000 during the peak selling season. As a result, the Company's annual
operating results have been, and will continue to be, heavily dependent on the
results of its peak selling season. Net sales are generally lowest during the
period from April through July, and the Company historically has not become
profitable, if at all, until the fourth quarter of a given fiscal year.

         The Company does not believe that inflation has had a material adverse
effect on the results of operations for the periods presented; however, there
can be no assurance that the Company's business will not be affected by
inflation in the future.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 28, 2000 COMPARED TO
THE THREE MONTHS ENDED OCTOBER 30, 1999

         Net sales increased 11.2% to $108.6 million in 2000 from $97.7 million
in 1999. Contributing to the $10.9 million sales increase were (i) a $0.9
million, or 1.0%, comparable store sales increase due to the continued strong
sales of young women's merchandise, and (ii) a $10.0 million increase in
non-comparable store sales due to new stores that have been open less than one
year.

         Wilsons Leather opened 27 stores and closed three stores in the third
quarter ended October 28, 2000 compared to opening 24 stores and closing one
store during the third quarter last year. Included in the 27 stores opened this
year are 20 mall and seven outlet stores. As of October 28, 2000, Wilsons
Leather operated 571 stores compared to 538 stores at October 30, 1999.

                                       10
<PAGE>

         Cost of goods sold, buying and occupancy costs for the third quarter of
2000 were 66.1% of net sales, or $71.8 million, compared to 66.2% of net sales,
or $64.7 million, for the same period a year ago. This decrease in cost resulted
in an increase of 0.1 points as a percentage of net sales in gross margin. Gross
margin increased compared to last year due primarily to strong sales of higher
margin fashion merchandise. The Company's inventories are valued under the
retail inventory method on the last-in, first-out (LIFO) basis. The difference
in inventories between LIFO and the first-in first-out (FIFO) method was not
material as of October 28, 2000 and October 30, 1999.

         Selling, general and administrative expenses for the quarter were 33.2%
of net sales, or $36.0 million, compared to 33.5% of net sales, or $32.7
million, last year. The Company was able to leverage selling, general and
administrative expenses, even with a $0.8 million increase in e-commerce
spending and costs incurred to add staff and technology to build the
infrastructure to facilitate its growth, and decreased them 0.3 points as a
percentage of net sales.

         Depreciation and amortization expense for the quarter increased to $2.7
million from $1.7 million last year, and increased as a percentage of net sales
to 2.5% from 1.8%. The increase in depreciation and amortization resulted
primarily from capital expenditures for a new point-of-sale system, new store
construction and the renovation of existing stores.

         Net interest expense for the quarter increased to $2.0 million from
$1.8 million last year. The change was primarily the result of increased
borrowings under the Senior Credit Facility (as defined below) for inventory
purchases offset by less long-term debt outstanding compared to the third
quarter last year.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED OCTOBER 28, 2000 COMPARED TO THE
NINE MONTHS ENDED OCTOBER 30, 1999

         Net sales increased 12.9% to $255.5 million in 2000 from $226.3 million
in 1999. Contributing to the $29.2 million sales increase were: (i) a $9.4
million increase associated with a 4.5% comparable store sales increase due to
strong sales across all merchandise categories, particularly women's fashion
merchandise and (ii) a $19.8 million increase in non-comparable store sales due
to new stores that have been open less than one year.

         Wilsons Leather opened 51 stores and closed nine stores in the nine
months ended October 28, 2000 compared to opening 29 stores and closing ten
stores in the same period last year. Included in the 51 stores opened in the
first nine months of 2000 are 29 mall and 22 outlet stores.

         Cost of goods sold, buying and occupancy costs were 71.1% of net sales,
or $181.6 million, compared to 73.9% of net sales, or $167.2 million, for the
same period a year ago. Gross margin net of buying and occupancy costs improved
2.4% as a percentage of net sales compared to last year due primarily to strong
sales of higher margin fashion merchandise and fewer markdowns due to strong
spring sales. The Company leveraged buying and occupancy costs due to the 4.5%
comparable store sales increase.

         Selling, general and administrative expenses were 37.4% of net sales,
or $95.6 million, compared to 35.9% of net sales, or $81.2 million, for the same
period last year. The increase is due to the investment of $4.1 million in the
Company's e-commerce initiative, adding management staff and technology to
support the Company's growth, and increased marketing expenditures over 1999 to
continue the Company's brand-building strategy.

                                       11
<PAGE>

         Depreciation and amortization expense increased to $7.1 million from
$4.7 million in the same period last year. The increase resulted primarily from
capital expenditures for a new point-of-sale system, new store construction and
the renovation of existing stores.

         Net interest expense decreased to $2.0 million from $4.1 million during
the same period last year. The decrease is primarily the result of less
long-term debt outstanding during 2000.

         The Company repurchased $13.3 million of its 11-1/4% Senior Notes due
2004 (Senior Notes) during the nine months ended October 28, 2000. The Company
incurred an extraordinary loss, net of tax of $0.4 million, of approximately
$0.6 million for the early extinguishment of debt. The Company repurchased $26.1
million of its Senior Notes during the nine months ended October 30, 1999. The
Company incurred an extraordinary loss, net of tax of $0.6 million, of
approximately $1.0 million for early extinguishment of debt.

         Effective January 31, 1999, the Company changed its method of
accounting for layaway sales in accordance with Staff Accounting Bulletin (SAB)
No. 101, "Revenue Recognition in Financial Statements." SAB No. 101 was released
in December 1999. Historically, the Company recognized revenue from layaway
sales in full upon the initial customer down payment. Under the new accounting
method adopted retroactive to January 31, 1999, the Company now recognizes
layaway sales in full upon final payment and delivery of merchandise to the
customer. The Company recorded an after-tax charge of $1.4 million in the first
quarter of 1999 for the cumulative effect of this change in accounting
principle.

LIQUIDITY AND CAPITAL RESOURCES

         Wilsons Leather's capital requirements are primarily driven by the
Company's seasonal working capital needs and its strategy to open new stores,
remodel existing stores and upgrade information systems. During the first nine
months of 2000, the Company opened 42 stores net of closings and anticipates it
will open approximately eight additional stores net of closings by the end of
the fiscal year. The Company's peak working capital needs typically occur during
the period from August through early December as inventory levels increase in
advance of the Company's peak selling season from October through December.

         General Electric Capital Corporation and a syndicate of banks have
provided the Company with a senior credit facility (the Senior Credit Facility).
The Senior Credit Facility, which was amended October 31, 2000, provides for
borrowings up to $165.0 million in aggregate principal amount, which includes a
letter of credit subfacility of $85.0 million. The maximum amount available
under the Senior Credit Facility is limited to 60% of net inventories (65%
during the months of September and October plus a $7.5 million seasonal
over-advance). The Company has a seasonal over-advance of $20.0 million for
November 2000 only, with interest on the over-advance at 100 basis points over
the Senior Credit Facility interest rate. The Company's cash borrowing
availability is also reduced by outstanding letters of credit.

         Interest is payable on borrowings at one or more variable rates
determined by LIBOR plus 1.25%, dealer commercial paper rate plus 1.25% or
"prime" plus 0.0% rate (7.87% at October 28, 2000). The spreads are subject to
increase based on the Company's financial results. As of October 28, 2000, the
Company had $81.6 million of borrowings under the Senior Credit Facility and
$37.6 million in outstanding letters of credit. The Company pays monthly fees on
the unused portion of

                                       12
<PAGE>

the Senior Credit Facility and on the average daily amount of letters of credit
outstanding during each month. The Senior Credit Facility expires in May 2002.

         On October 31, 2000, the Company acquired El Portal Group, Inc. ("El
Portal") by merging a newly formed subsidiary with and into El Portal. The
acquisition price, excluding assumed debt, was approximately $16.9 million. The
acquisition was funded with cash from the Company's Senior Credit Facility. It
will be accounted for under the purchase method with the purchase price
allocated to the acquired assets and assumed liabilities based on fair market
value.

         The Senior Credit Facility contains certain covenants limiting, among
other things, the Company's ability to make capital expenditures, pay cash
dividends or make other distributions. The Company was in compliance with all
covenants as of October 28, 2000.

         The Company plans to use the Senior Credit Facility for its immediate
and future working capital needs, including capital expenditures. For 1999, the
peak borrowings and letters of credit outstanding under the Senior Credit
Facility were $47.7 million and $52.6 million, respectively. The peak time of
year is October through December for borrowings and August through September for
letters of credit. The Company is dependent on the Senior Credit Facility to
fund working capital and letter of credit needs. Management believes that
borrowing capacity under the Senior Credit Facility, together with current and
anticipated cash flow from operations, should be adequate to meet the Company's
anticipated working capital and capital expenditure requirements.

         On January 29, 2000, the Company had $43.9 million of its Senior Notes
outstanding. As of October 28, 2000, the Company had reduced the outstanding
balance to $30.6 million by repurchasing, at various times, $13.3 million of its
Senior Notes.

         The Company entered into a $40.0 million interest rate swap transaction
with First Union National Bank (First Union) whereby First Union pays the
Company interest at a fixed rate of 11.25% and the Company pays First Union
interest at a commercial paper rate plus 5.37% (6.51% at October 28, 2000). The
swap is not active during the period of September 14 to December 15, during each
year of the agreement. The agreement terminates on August 15, 2001. As of
October 28, 2000 the transaction had not had a material impact on the Company's
financial position or results of operations.

CASH FLOW ANALYSIS

         Operating activities for the nine months ended October 28, 2000,
resulted in cash used of $171.7 million compared to cash used of $106.4 million
in 1999. The cash used was primarily the result of the seasonal changes in the
Company's current assets and liabilities. The increase in cash used compared to
last year is due primarily to increases in inventory during the first nine
months of 2000 compared to 1999 to replenish the low inventory levels at year
end, to purchase inventory for new store openings and to purchase leather to
protect the Company from cost increases due to increased demand for leather.

         Changes in certain balance sheet accounts between January 29, 2000, and
October 28, 2000, reflect normal seasonal variations within the retail industry.
The level of cash and cash equivalents, inventories, accounts receivable,
accounts payable and certain accrued liabilities fluctuate due to the seasonal
nature of the working capital needs of the Company's operations.

                                       13
<PAGE>

         Investing activities for the nine months ended October 28, 2000 totaled
$21.8 million and were primarily comprised of capital expenditures for a new
point-of-sale system, the renovation of and improvements to existing stores and
construction of new stores. Investing activities for the nine months ended
October 30, 1999, totaled $16.2 million and were primarily comprised of the
renovation of and improvements to existing stores and construction of new
stores.

         Net cash provided by financing activities for the nine months ended
October 28, 2000 and October 30, 1999 of $69.2 million and $14.4 million,
respectively, was primarily provided by borrowings under the Senior Credit
Facility and proceeds from issuance of common stock partially offset by
repurchasing Senior Notes.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's exposure to market risks for changes in interest rates
relates primarily to the Company's short-term investments, short-term
borrowings, long-term debt obligations and interest rate swap agreement. The
Company does not use derivative financial instruments in its available for sale
securities. The Company is averse to principal loss and ensures the safety and
preservation of its investments by limiting default risk and market risk.

         The Company mitigates default risk by investing in high credit quality
securities. Market risk is limited by including only securities with active
markets in our portfolio. All short-term investments mature within one year.

         At October 28, 2000, Wilsons Leather had cash and cash equivalents
totaling $0.7 million. The effect of a 100 basis point change in interest rates
would have an estimated $285,000 pre-tax earnings and cash flow impact, assuming
other variables are held constant.

         The Company's Senior Credit Facility carries interest rate risk that is
generally related to either LIBOR, dealer commercial paper rate or the prime
rate. If any of those rates were to change while Wilsons Leather was borrowing
under the facility, interest expense would increase or decrease accordingly. As
of October 28, 2000, there was $81.6 million of outstanding borrowings under the
Senior Credit Facility and $37.6 million in outstanding letters of credit.

         The Company has no earnings or cash flow exposure due to market risks
on its Senior Notes as a result of the fixed-rate nature of the debt. However,
interest rate changes would affect the fair market value of the debt. At October
28, 2000, Wilsons Leather had fixed rate debt of $30.6 million maturing in
August 2004.

         The Company entered into a $40.0 million interest rate swap transaction
whereby First Union pays the Company interest at a fixed rate of 11.25%, and the
Company pays First Union interest at a commercial paper rate plus 5.37% (6.51%
at October 28, 2000). The agreement terminates on August 15, 2001. The effect of
a 100 basis point change in interest rates would have an estimated $500,000
pre-tax earnings and cash flow impact, assuming other variables are held
constant. The swap is not active during the period of September 14 to December
15, during each year of the agreement.

                          ----------------------------

                                       14
<PAGE>

         Except for historical information, matters discussed in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements involve risks and uncertainties, and actual results
may be materially different. Because actual results may differ, readers are
cautioned not to place undue reliance on forward-looking statements. Factors
that could cause actual results to differ include: changes in consumer
preferences and fashion trends away from leather; economic downturns;
seasonality of the business; risks associated with foreign sourcing and
international business; decreased availability and increased cost of leather;
accelerated future growth depends on ability to make acquisitions; concentration
of the Company's common stock; risks associated with future growth; loss of
Chief Executive Officer or President; debt service; increased competition in the
retail leather outerwear, apparel and accessories industry; failure to attract
qualified personnel; and volatility of the Company's common stock. Certain of
these risk factors are more fully discussed in the Company's Annual Report on
Form 10-K for the fiscal year ended January 29, 2000.

                                       15
<PAGE>

PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

         See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" in Part I., Item 2. of
the document for a description of limitations on the payment of dividends.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         A.       Exhibits

                  EXHIBIT     DESCRIPTION
                  -------     -----------

                    3.1       Amended and Restated Articles of Incorporation of
                              Wilsons The Leather Experts Inc. adopted June 16,
                              1998 as amended by the Articles of Amendment dated
                              February 17, 2000.

                    3.2       Restated Bylaws of Wilsons The Leather Experts
                              Inc. as amended June 16, 1998 and January 25,
                              2000.

                    4.1       Specimen of common stock certificate.

                    4.2       Indenture dated as of August 18, 1997 by and among
                              Wilsons The Leather Experts Inc., the other
                              corporations listed on the signature pages
                              thereof, and Wells Fargo Bank Minnesota, National
                              Association (formerly known as Norwest Bank
                              Minnesota, National Association), including
                              specimen Certificate of 11 1/4% Series A Senior
                              Notes due 2004 and specimen Certificate of 11 1/4%
                              Series B Senior Notes due 2004.

                    4.3       Purchase Agreement dated as of August 14, 1997, by
                              and among Wilsons The Leather Experts Inc., the
                              Subsidiary Guarantors party thereto and
                              BancAmerica Securities, Inc.

                    4.4       Registration Rights Agreement dated as of May 25,
                              1996, by and among CVS New York, Inc., Wilsons The
                              Leather Experts Inc., the Managers listed on the
                              signature pages thereto, Leather Investors Limited
                              Partnership I and the Partners listed on the
                              signature pages thereto.

                                       16
<PAGE>

                    4.5       Amendment to Registration Rights Agreement dated
                              as of August 12, 1999 by and among Wilsons The
                              Leather Experts Inc. and the Shareholders listed
                              on the attachments thereto.

                    10.1      Second Amended and Restated Credit Agreement dated
                              as of October 31, 2000 among Wilsons Leather
                              Holdings Inc. as Borrower, the Lenders signatory
                              thereto from time to time, as Lenders, and General
                              Electric Capital Corporation, as Agent, Lender and
                              Swing Line Lender (the "Credit Agreement").

                    10.2      Supplemental Security Agreement dated as of
                              October 31, 2000, by and among Wilsons Leather
                              Holdings Inc. and the other Grantors listed on the
                              signature pages thereto, in favor of General
                              Electric Capital Corporation, in its capacity as
                              Agent for Lenders.

                    10.3      Reaffirmation of Guaranty dated as of October 31,
                              2000, by Wilsons The Leather Experts Inc., Wilsons
                              Center, Inc., Rosedale Wilsons, Inc. and River
                              Hill Wilsons, Inc., as parents, and the Individual
                              Store Guarantors that are signatories thereto, in
                              favor of General Electric Capital Corporation.

                    10.4      Joinder Agreement dated as of October 31, 2000, by
                              and between General Electric Capital Corporation,
                              El Portal, Inc., WWT, Inc. and Travelsupplies.com,
                              LLC.

                    10.5      Pledge Amendment dated as of October 31, 2000, by
                              and between River Hills Wilsons, Inc. and General
                              Electric Capital Corporation, individually and as
                              Agent for the Lenders signatory to the Credit
                              Agreement.

                    10.6      Pledge Agreement WWT, Inc. dated as of October 31,
                              2000, between WWT, Inc. and General Electric
                              Capital Corporation, individually and as Agent for
                              the Lenders signatory to the Credit Agreement.

                                       17
<PAGE>

                    27.1      Financial Data Schedule

         B.       Exhibits and Reports on Form 8-K: The Company did not file any
                  reports on Form 8-K during the third quarter ended October 28,
                  2000.

                                       18
<PAGE>

                                    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.



WILSONS THE LEATHER EXPERTS INC.


By: /S/
    --------------------------------------------
         Daniel R. Thorson
         Treasurer (principal financial officer)


Date:    December 12, 2000

                                       19
<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT        DESCRIPTION                                                               METHOD OF FILING
NO.            -----------                                                               ----------------
-------
<S>      <C>                                                                          <C>
3.1      Amended and Restated Articles of Incorporation of Wilsons The Leather        Incorporated by Reference
         Experts Inc. adopted June 16, 1998 as amended by the Articles of
         Amendment dated February 17, 2000. (1)

3.2      Restated Bylaws of Wilsons The Leather Experts Inc. as amended June 16,      Incorporated by Reference
         1998 and January 25, 2000. (1)

4.1      Specimen of common stock certificate. (2)                                    Incorporated by Reference

4.2      Indenture dated as of August 18, 1997 by and among Wilsons The Leather       Incorporated by Reference
         Experts Inc., the other corporations listed on the signature pages
         thereof, and Wells Fargo Bank Minnesota, National Association (formerly
         known as Norwest Bank Minnesota, National Association), including
         specimen Certificate of 11 1/4% Series A Senior Notes due 2004 and
         specimen Certificate of 11 1/4% Series B Senior Notes due 2004. (3)

4.3      Purchase Agreement dated as of August 14, 1997, by and among Wilsons         Incorporated by Reference
         The Leather Experts Inc., the Subsidiary Guarantors party thereto and
         BancAmerica Securities, Inc. (4)

4.4      Registration Rights Agreement dated as of May 25, 1996, by and among         Incorporated by Reference
         CVS New York, Inc., Wilsons The Leather Experts Inc., the Managers
         listed on the signature pages thereto, Leather Investors Limited
         Partnership I and the Partners on the signature pages thereto. (5)

4.5      Amendment to Registration Rights Agreement dated as of August 12, 1999       Incorporated by Reference
         by and among Wilsons The Leather Experts Inc. and the Shareholders
         listed on the attachments thereto. (1)

10.1     Second Amended and Restated Credit Agreement dated as of October 31, 2000    Electronic Transmission
         among Wilsons Leather Holdings Inc. as Borrower, the Lenders signatory
         thereto from time to time, as Lenders, and General Electric Capital
         Corporation, as Agent, Lender and Swing Line Lender (the "Credit
         Agreement").

10.2     Supplemental Security Agreement dated as of October 31, 2000, by and         Electronic Transmission
         among Wilsons Leather Holdings Inc. and the other Grantors listed on
         the signature pages thereto, in favor of General Electric Capital
         Corporation, in its capacity as Agent for Lenders.
</TABLE>

                                       20
<PAGE>

<TABLE>

<S>      <C>                                                                          <C>
10.3     Reaffirmation of Guaranty dated as of October 31, 2000, by Wilsons The       Electronic Transmission
         Leather Experts Inc., Wilsons Center, Inc., Rosedale Wilsons, Inc. and
         River Hills Wilsons, Inc., as parents, and the Individual Store Guarantors
         that are signatories thereto, in favor of General Electric Capital
         Corporation.

10.4     Joinder Agreement dated as of October 31, 2000, by and between General       Electronic Transmission
         Electric Capital Corporation, El Portal, Inc. WWT, Inc., and
         Travelsupplies.com, LLC.

10.5     Pledge Amendment dated as of October 31, 2000, by and between River Hills    Electronic Transmission
         Wilsons, Inc. and General Electric Capital Corporation, individually and
         as Agent for the Lenders signatory to the Credit Agreement.

10.6     Pledge Agreement WWT, Inc. dated as of October 31, 2000, between WWT, Inc.   Electronic Transmission
         and General Electric Capital Corporation, individually and as Agent for
         the Lenders signatory to the Credit Agreement.

27.1     Financial Data Schedule                                                      Electronic Transmission

</TABLE>

(1)      Incorporated by reference to the same numbered exhibit to the Company's
         Report on Form 10-K for the fiscal year ended January 29, 2000 filed
         with the Commission.
(2)      Incorporated by reference to the same numbered exhibit to Amendment No.
         1 to the Company's Registration Statement on Form S-1 (333-13967) filed
         with the Commission on December 24, 1996.
(3)      Incorporated by reference to Exhibit 10.3 to the Company's Report on
         Form 10-Q for the quarter ended August 2, 1997 filed with the
         Commission.
(4)      Incorporated by reference to Exhibit 10.4 to the Company's Report on
         Form 10-Q for the quarter ended August 2, 1997 filed with the
         Commission.
(5)      Incorporated by reference to Exhibit 4.8 to the Company's Registration
         Statement on Form S-1 (333-13967) filed with the Commission on October
         11, 1996.

                                       21