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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 May 3, 2003

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
incorporation or organization) |  | (I.R.S. Employer
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   [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).     Yes   [X]   No   [  ]

As of June 2, 2003, there were 20,616,325 shares of common stock, $0.01 par
value per share, outstanding.





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TABLE OF CONTENTS



|                                      |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|                                      |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                                      |                                                                                               | Consolidated Statements of Operations     
|                                      |                                                                                               | Consolidated Statements of Cash Flows     
|                                      |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                      | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                      | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                            
|                                      | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION          
|                                      | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                            
|                                      | ITEM 6. EXHIBITS AND REPORT ON FORM 8-K                                                      
|SIGNATURE                            
|CERTIFICATIONS                       
|Ex-10.1 2000 Long Term Incentive Plan
|EX-10.2 Employee Stock Purchase Plan 
|EX-99.1 Certifications of CEO and CFO



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WILSONS THE LEATHER EXPERTS INC.

INDEX


|                               |                                                   |                                                                                              |  |      |    | 
|------------------------------ | ------------------------------------------------- | -------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                               |                                                   |                                                                                              |  | Page
|                               |                                                   |                                                                                              |  |     
|PART I  FINANCIAL INFORMATION
|                               | Item 1.                                           | Consolidated Financial Statements (Unaudited)                                                |  |      |    | 
|                               |                                                   | Consolidated Balance Sheets as of May 3, 2003 and
February 1, 2003                           |  |      | 3  | 
|                               |                                                   | Consolidated Statements of Operations for the
three months ended May 3, 2003 and May 4, 2002 |  |      | 4  | 
|                               |                                                   | Consolidated Statements of Cash Flows for the
three months ended May 3, 2003 and
May 4, 2002 |  |      | 5  | 
|                               |                                                   | Notes to Consolidated Financial Statements                                                   |  |      | 6  | 
|                               | Item 2.                                           | Managements Discussion and Analysis of Financial
Condition and Results of Operations        |  |      | 14 | 
|                               | Item 3.                                           | Quantitative and Qualitative Disclosures About Market Risk                                   |  |      | 22 | 
|                               | Item 4.                                           | Controls and Procedures                                                                      |  |      | 22 | 
|PART II  OTHER INFORMATION    |                                                   |                                                                                              |  |     
|                               | Item 2. Changes in Securities and Use of Proceeds |                                                                                              |  | 23   |   
|                               | Item 6. Exhibits and Report on Form 8-K           |                                                                                              |  | 23   |   
|                               | Signature                                         |                                                                                              |  | 25   |   
|                               | Certifications                                    |                                                                                              |  | 26   |   

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WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |         |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------------ | ------ | ----------- | ------- | ----------- | ------ | ------- | ------- | 
|                                                                                                                                                                       |                                        |                                            |        | May 3,      |         | February 1,
|                                                                                                                                                                       |                                        |                                            |        | 2003        |         | 2003 (1)   
|                                                                                                                                                                       |                                        |                                            |        |             |         |            
|                                                                                                                                                                       |                                        |                                            |        | (Unaudited) |         |             |        |        
|ASSETS                                                                                                                                                                 |                                        |                                            |        |             |         |             |        |        
|CURRENT ASSETS:                                                                                                                                                        |                                        |                                            |        |             |         |             |        |        
|                                                                                                                                                                       | Cash and cash equivalents              |                                            | $      | 21,283      |         |             | $      | 30,442  |        
|                                                                                                                                                                       | Accounts receivable, net               |                                            |        | 4,577       |         |             |        | 5,162   |        
|                                                                                                                                                                       | Inventories                            |                                            |        | 88,528      |         |             |        | 118,701 |        
|                                                                                                                                                                       | Prepaid expenses                       |                                            |        | 9,480       |         |             |        | 3,812   |        
|                                                                                                                                                                       | Assets of discontinued operations      |                                            |        | 93          |         |             |        | 3,379   |        
|                                                                                                                                                                       | Deferred income taxes                  |                                            |        |            |         |             |        | 3,777   |        
|                                                                                                                                                                       | Refundable income taxes                |                                            |        | 10,570      |         |             |        | 3,064   |        
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |         |        
|                                                                                                                                                                       |                                        | TOTAL CURRENT ASSETS                       |        |             | 134,531 |             |        |         | 168,337 | 
|Property and equipment, net                                                                                                                                            |                                        |                                            | 71,571 |             |         |             | 73,974 |        
|Goodwill and other assets, net                                                                                                                                         |                                        |                                            | 3,917  |             |         |             | 3,315  |        
|Deferred income taxes                                                                                                                                                  |                                        |                                            | 526    |             |         |             | 865    |        
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |         |        
|                                                                                                                                                                       |                                        | TOTAL ASSETS                               |        | $           | 210,545 |             |        | $       | 246,491 | 
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |        
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                   |                                        |                                            |        |             |         |             |        |        
|CURRENT LIABILITIES:                                                                                                                                                   |                                        |                                            |        |             |         |             |        |        
|                                                                                                                                                                       | Accounts payable                       |                                            | $      | 11,165      |         |             | $      | 19,492  |        
|                                                                                                                                                                       | Accrued expenses                       |                                            |        | 18,587      |         |             |        | 25,219  |        
|                                                                                                                                                                       | Liabilities of discontinued operations |                                            |        | 1,872       |         |             |        | 15,075  |        
|                                                                                                                                                                       | Deferred income taxes                  |                                            |        | 4,663       |         |             |        |        |        
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |         |        
|                                                                                                                                                                       |                                        | TOTAL CURRENT LIABILITIES                  |        |             | 36,287  |             |        |         | 59,786  | 
|Long-term debt                                                                                                                                                         |                                        |                                            | 55,684 |             |         |             | 55,695 |        
|Other long-term liabilities                                                                                                                                            |                                        |                                            | 13,878 |             |         |             | 13,782 |        
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |         |        
|                                                                                                                                                                       |                                        | TOTAL LIABILITIES                          |        |             | 105,849 |             |        |         | 129,263 | 
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |        
|COMMITMENTS AND CONTINGENCIES                                                                                                                                          |                                        |                                            |        |             |         |             |        |        
|                                                                                                                                                                      
|SHAREHOLDERS EQUITY:                                                                                                                                                  |                                        |                                            |        |             |         |             |        |        
|Common stock, $.01 par value; 150,000,000 shares authorized; 20,616,325 and 20,473,033
shares issued and outstanding on May 3, 2003 and February 1, 2003, respectively |                                        |                                            | 206    |             |         |             | 205    |        
|Additional paid-in capital                                                                                                                                             |                                        |                                            | 99,472 |             |         |             | 99,010 |        
|Retained earnings                                                                                                                                                      |                                        |                                            | 6,022  |             |         |             | 18,707 |        
|Unearned compensation                                                                                                                                                  |                                        |                                            | (1,000 | )           |         |             | (691   | )      
|Accumulated other comprehensive loss                                                                                                                                   |                                        |                                            | (4     | )           |         |             | (3     | )      
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |        
|                                                                                                                                                                       |                                        | TOTAL SHAREHOLDERS EQUITY                 |        |             | 104,696 |             |        |         | 117,228 | 
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |        
|                                                                                                                                                                       |                                        | TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |        | $           | 210,545 |             |        | $       | 246,491 | 
|                                                                                                                                                                       |                                        |                                            |        |             |         |             |        |        

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

|(1)-Derived from audited consolidated financial statements.
|-----------------------------------------------------------

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Wilsons The Leather Experts Inc. and Subsidiaries
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)

|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |       |         |  
|-------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | ------- | ------------------ | ------- | ------ | ------- | ----- | ------- | -
|                                                                                             |                                                                                              |                                                                                                               |         | Three Months Ended
|                                                                                             |                                                                                              |                                                                                                               |         |                   
|                                                                                             |                                                                                              |                                                                                                               |         | May 3,             |         | May 4,
|                                                                                             |                                                                                              |                                                                                                               |         | 2003               |         | 2002  
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |       
|NET SALES                                                                                    |                                                                                              | $                                                                                                             | 95,301  |                    |         | $      | 95,057  |      
|COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS                                               |                                                                                              |                                                                                                               | 77,212  |                    |         |        | 73,110  |      
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|                                                                                             |                                                                                              | Gross margin                                                                                                  |         |                    | 18,089  |        |         |       | 21,947  |  
|                                                                                            
|SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                                                 |                                                                                              |                                                                                                               | 32,770  |                    |         |        | 33,860  |      
|DEPRECIATION AND AMORTIZATION                                                                |                                                                                              |                                                                                                               | 4,279   |                    |         |        | 3,792   |      
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|                                                                                             |                                                                                              | Operating loss                                                                                                |         |                    | (18,960 | )      |         |       | (15,705 | )
|INTEREST EXPENSE, net                                                                        |                                                                                              |                                                                                                               | 2,268   |                    |         |        | 1,703   |      
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|                                                                                             |                                                                                              | Loss from continuing operations before income taxes and
cumulative effect of a change in accounting principle |         |                    | (21,228 | )      |         |       | (17,408 | )
|INCOME TAX BENEFIT                                                                           |                                                                                              |                                                                                                               | (8,491  | )                  |         |        | (6,963  | )    
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|Loss from continuing operations before cumulative effect of a
change in accounting principle |                                                                                              |                                                                                                               | (12,737 | )                  |         |        | (10,445 | )    
|                                                                                            
|LOSS FROM DISCONTINUED OPERATIONS, net of tax                                                |                                                                                              |                                                                                                               |        |                    |         |        | (4,232  | )    
|CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE, net of tax                            |                                                                                              |                                                                                                               |        |                    |         |        | (24,567 | )    
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|                                                                                             |                                                                                              | Net loss                                                                                                      |         | $                  | (12,737 | )      |         | $     | (39,244 | )
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|BASIC AND DILUTED LOSS PER SHARE:                                                            |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|                                                                                             | Loss from continuing operations before cumulative effect of
a change in accounting principle |                                                                                                               | $       | (0.62              | )       |        | $       | (0.54 | )      
|                                                                                             | Loss from discontinued operations                                                            |                                                                                                               |         |                   |         |        |         | (0.22 | )      
|                                                                                             | Cumulative effect of a change in accounting principle                                        |                                                                                                               |         |                    |         |        |         | (1.28 | )      
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|                                                                                             |                                                                                              | Basic and diluted loss per share                                                                              |         | $                  | (0.62   | )      |         | $     | (2.04   | )
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      
|Weighted average shares outstanding  basic and diluted                                      |                                                                                              |                                                                                                               | 20,438  |                    |         |        | 19,214  |      
|                                                                                             |                                                                                              |                                                                                                               |         |                    |         |        |         |      

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

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Wilsons The Leather Experts Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |         |         |         |  
|---------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------- | -------------------------- | ----- | ------- | ------- | ------- | ------- | -
|                                               |                                                                                                      |                                                                              |                                                                              |         | For the three months ended
|                                               |                                                                                                      |                                                                              |                                                                              |         |                           
|                                               |                                                                                                      |                                                                              |                                                                              |         | May 3,                     |       | May 4, 
|                                               |                                                                                                      |                                                                              |                                                                              |         | 2003                       |       | 2002   
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |        
|OPERATING ACTIVITIES:                          |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|                                               | Net loss                                                                                             |                                                                              | $                                                                            | (12,737 | )                          |       | $       | (39,244 | )      
|                                               |                                                                                                      | Loss from discontinued operations, net of tax                                |                                                                              |         |                           |       |         |         | 4,232   |        
|                                               |                                                                                                      | Cumulative effect of a change in accounting principle, net of tax            |                                                                              |         |                           |       |         |         | 24,567  |        
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |         |        
|                                               | Loss from continuing operations                                                                      |                                                                              |                                                                              | (12,737 | )                          |       |         | (10,445 | )      
|                                               | Adjustments to reconcile loss from continuing
operations to net cash provided by (used in) operating |                                                                              |                                                                              |         |                            |       |         |         |        
|                                               |                                                                                                      | activities:                                                                  |                                                                              |         |                            |       |         |         |         |        
|                                               |                                                                                                      | Depreciation                                                                 |                                                                              |         | 4,230                      |       |         |         | 3,780   |        
|                                               |                                                                                                      | Amortization                                                                 |                                                                              |         | 49                         |       |         |         | 12      |        
|                                               |                                                                                                      | Amortization of deferred financing costs                                     |                                                                              |         | 375                        |       |         |         | 221     |        
|                                               |                                                                                                      | Loss on disposal of assets                                                   |                                                                              |         |                           |       |         |         | 119     |        
|                                               |                                                                                                      | Restricted stock compensation expense                                        |                                                                              |         | 50                         |       |         |         | 98      |        
|                                               |                                                                                                      | Deferred income taxes                                                        |                                                                              |         | 8,779                      |       |         |         |        |        
|                                               | Changes in operating assets and liabilities:                                                         |                                                                              |                                                                              |         |                            |       |         |         |        
|                                               |                                                                                                      | Accounts receivable, net                                                     |                                                                              |         | 585                        |       |         |         | 1,773   |        
|                                               |                                                                                                      | Inventories                                                                  |                                                                              |         | 30,173                     |       |         |         | 15,913  |        
|                                               |                                                                                                      | Prepaid expenses                                                             |                                                                              |         | (5,668                     | )     |         |         | (6,306  | )      
|                                               |                                                                                                      | Refundable income taxes                                                      |                                                                              |         | (7,506                     | )     |         |         | (643    | )      
|                                               |                                                                                                      | Accounts payable and accrued expenses                                        |                                                                              |         | (14,959                    | )     |         |         | (11,794 | )      
|                                               |                                                                                                      | Income taxes payable and other liabilities                                   |                                                                              |         | 99                         |       |         |         | (9,672  | )      
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |         |        
|                                               |                                                                                                      |                                                                              | Net cash provided by (used in) operating activities of continuing operations |         |                            | 3,470 |         |         |         | (16,944 | )
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|INVESTING ACTIVITIES:                          |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|                                               | Additions
to property and equipment                                                                  |                                                                              |                                                                              | (2,008  | )                          |       |         | (1,799  | )      
|                                               | Changes in other assets                                                                              |                                                                              |                                                                              | 52      |                            |       |         |        |        
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|                                               |                                                                                                      | Net cash used in investing activities of continuing operations               |                                                                              |         | (1,956                     | )     |         |         | (1,799  | )      
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|FINANCING ACTIVITIES:                          |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|                                               | Proceeds from issuance of common stock, net                                                          |                                                                              |                                                                              | 100     |                            |       |         | 11,318  |        
|                                               | Debt acquisition costs                                                                               |                                                                              |                                                                              | (1,025  | )                          |       |         | (1,357  | )      
|                                               | Repayments of long-term debt                                                                         |                                                                              |                                                                              | (11     | )                          |       |         |        |        
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |         |        
|                                               |                                                                                                      | Net cash provided by (used in) financing activities of continuing operations |                                                                              |         | (936                       | )     |         |         | 9,961   |        
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|NET CASH USED IN DISCONTINUED OPERATIONS       |                                                                                                      |                                                                              | (9,737                                                                       | )       |                            |       | (20,394 | )      
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |        
|NET DECREASE IN CASH AND CASH EQUIVALENTS      |                                                                                                      |                                                                              | (9,159                                                                       | )       |                            |       | (29,176 | )      
|CASH AND CASH EQUIVALENTS, beginning of period |                                                                                                      |                                                                              | 30,442                                                                       |         |                            |       | 38,953  |        
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |         |        
|CASH AND CASH EQUIVALENTS, end of period       |                                                                                                      | $                                                                            | 21,283                                                                       |         |                            | $     | 9,777   |        
|                                               |                                                                                                      |                                                                              |                                                                              |         |                            |       |         |         |        

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

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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), a
Minnesota corporation, acquired 100 percent of the common stock of Wilsons
Center, Inc. and its subsidiaries (the predecessor companies prior to the
Management Buyout) in a management-led buyout (the Management Buyout) from
CVS New York, Inc. (CVS) (formerly Melville Corporation, the parent company
to the predecessor companies), a New York corporation. In May 1996, pursuant
to a sale agreement between Wilsons Leather and CVS, Wilsons Leather acquired
the common stock for (i) $2.0 million, (ii) a 10 percent senior secured
subordinated note due December 31, 2000, in the principal amount of $55.8
million, (iii) a warrant to purchase 2,025,000 shares of common stock, (iv) a
warrant to purchase 1,620,000 shares of common stock (reduced by terms of the
restricted stock agreement), (v) 6,480,000 shares of common stock, and (vi)
7,405 shares of preferred stock (Series A Preferred). As part of the
Management Buyout, the Leather Investors Limited Partnerships I and
II
in turn purchased from CVS the 6,480,000 shares of common stock and the 7,405
shares of Series A Preferred stock for $10.0 million.

The Company is the leading specialty retailer of quality leather
outerwear, accessories and apparel in the United States. As of May 3, 2003,
Wilsons Leather operated 612 permanent retail stores located in 45 states, the
District of Columbia and Canada, including 478 mall stores, 111 outlet stores
and 23 airport stores. The Company, which regularly supplements its permanent
mall stores with seasonal stores during its peak selling season from October
through January, operated 284 seasonal stores in 2002 and plans to operate
approximately 225 seasonal stores this fiscal year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements include those of the
Company and all of its subsidiaries. All material intercompany balances and
transactions between the entities have been eliminated in consolidation. At
May 3, 2003, Wilsons Leather operated in one segment: selling leather
outerwear, accessories and apparel. The Companys chief operating
decision-maker evaluates revenue and profitability performance on an enterprise
basis to make operating and strategic decisions.

As more fully described in Note 3 to our Consolidated Financial Statements
in our 2002 Annual Report on Form 10-K, El Portal Group, Inc., Bentleys
Luggage Corp. and Florida Luggage Corp. (the Travel Subsidiaries) were
liquidated during 2002 and have been presented as discontinued operations
effective November 19, 2002. The consolidated financial statements have been
reclassified to segregate the net investment in, and the liabilities and
operating results of, the Travel Subsidiaries for all prior periods presented.
Prior to the liquidation, the Travel Subsidiaries were reported as a separate
operating segment. See also Note 3 to the Consolidated Financial Statements
(Unaudited) contained herein.

The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission.

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Certain information and footnote disclosure, normally included in
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America, 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
consolidated financial statements be read in conjunction with the Companys
most recent audited consolidated financial statements and related notes
included in its 2002 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 fiscal year
ending January 31, 2004.

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE

On February 3, 2002, new accounting rules for business combinations and
accounting for goodwill and other intangibles, SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, became
effective for the Company. As a result and from that day forward, goodwill is
no longer amortized against earnings and goodwill balances are subject to
impairment review on at least an annual basis.

Under the transitional provisions of SFAS No. 142, the Companys goodwill
related to the Travel Subsidiaries was tested for impairment during the second
quarter of 2002 using a February 2, 2002 measurement date. Each of the
Companys reporting units was tested for impairment by comparing the fair value
of each reporting unit with its carrying value. A reporting unit is the same
as, or one level below an operating segment. For purposes of our Company,
reporting units were defined as Wilsons and the Travel Subsidiaries. Fair value
was determined based on a valuation study performed by an independent third
party which primarily considered the discounted cash flow method, guideline
company (comparable companies) and similar transaction methods. As a result
of the Companys impairment test, the Company recorded a pretax impairment loss
to reduce the carrying value of goodwill of the Travel Subsidiaries by $26.3 million
to its implied fair value. Impairment was due to a combination of factors
including acquisition price, post-acquisition capital expenditures and
operating performance.

The cumulative effect of this accounting change, net of a $1.7 million tax
benefit, was originally reported in the Companys Statement of Operations for
the six months ended August 3, 2002. The financial statements presented for
the three months ended May 4, 2002 have been revised to reflect the $24.6
million net charge as the cumulative effect of a change in accounting principle
in the three months ended May 4, 2002, as required by SFAS No. 142.

FISCAL YEAR

Wilsons Leathers fiscal year ends on the Saturday closest to January 31.
The periods ended January 31, 2004, February 1, 2003, and February 2, 2002, are
referred to herein as fiscal years 2003, 2002 and 2001, respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses

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during the reporting period. Matters of significance in which management
relies on these estimates relate primarily to the realizability of assets, such
as accounts receivable, property and equipment, and inventories, and the
adequacy of certain accrued liabilities and reserves. Ultimate results could
differ from those estimates.

INVENTORIES

The Company values its inventories, which consist primarily of finished
goods held for sale that have been purchased from domestic and foreign vendors,
at the lower of cost or market value, determined by the retail inventory method
on the last-in, first-out (LIFO) basis. As of May 3, 2003, and February 1,
2003, the LIFO cost of inventories approximated the first-in, first-out
cost of inventories. The inventory cost includes the cost of
merchandise and freight. A periodic review of inventory quantities on hand is
performed in order to determine if inventory value is properly stated at the
lower of cost or market. Factors related to current inventories such as future
consumer demand and fashion trends, current aging, current and anticipated
retail markdowns and class or type of inventory are analyzed to determine
estimated net realizable values. A provision is recorded to reduce the cost of
inventories to the estimated net realizable values, if required. Any
significant unanticipated changes in the factors noted above could have a
significant impact on the value of the Companys inventories and its reported
operating results.

STORE CLOSING AND IMPAIRMENT OF LONG-LIVED ASSETS

The Company continually reviews its stores operating performance and
assesses plans for store closures. In accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets,losses related to the impairment of long-lived
assets are recognized when expected future cash flows are less than the assets
carrying value. When a store is closed or when a change in circumstances
indicates the carrying value of an asset may not be recoverable, the Company
evaluates the carrying value of the asset in relation to its expected future
cash flows. If the carrying value is greater than the expected future cash
flows, a provision is made for the impairment of the asset to write the asset
down to estimated fair value. Fair value is determined by estimating net
future cash flows, discounted using a risk-adjusted rate of return. These
impairment charges are recorded as a component of selling, general and
administrative expense.

For stores to be closed that are under long-term leases, the Company
records a liability for the future minimum lease payments and related ancillary
costs, from the date of closure to the end of the remaining lease term, net of
estimated cost recoveries that may be achieved through subletting properties or
through favorable lease terminations, discounted using a risk-adjusted rate of
interest. This liability is recorded at the time the store is closed. At May
3, 2003, and February 1, 2003, the Company had $0.3 and $0.4 million,
respectively, accrued for store lease terminations.

REVENUE RECOGNITION

The Company recognizes sales upon customer receipt of the merchandise
generally at the point of sale. Shipping and handling revenues are excluded
from net sales as a contra-expense and the related costs are included in costs
of goods sold, buying and occupancy costs. Revenue for gift certificate sales
and store credits is recognized at redemption. A reserve is provided at the
time of sale for projected merchandise returns based upon historical
experience. The Company recognizes revenue for on-line sales at the time goods
are received by the customer. An allowance for on-line sales is recorded to
cover in-transit shipments, as product is shipped to these customers Free on
Board (FOB) destination.

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INCOME TAXES

Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

LOSS PER SHARE

Basic loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding during the year. Diluted loss per
share is computed by dividing net loss by the sum of the weighted average
number of common shares outstanding plus all additional common shares that
would have been outstanding if potentially dilutive common shares related to
stock options had been issued. The following table reconciles the number of
shares utilized in the loss per share calculations (in thousands):

|                                                     |  |                            |        |             |  |  |        | 
|---------------------------------------------------- |  | -------------------------- | ------ | ----------- |  |  | ------ | 
|                                                     |  | For the three months ended
|                                                     |  |                           
|                                                     |  | May 3, 2003                |        | May 4, 2002
|                                                     |  |                            |        |            
|Weighted average common shares outstanding  basic   |  |                            | 20,438 |             |  |  | 19,214 | 
|Effect of dilutive securities: stock options         |  |                            |       |             |  |  |       | 
|                                                     |  |                            |        |             |  |  |        | 
|Weighted average common shares outstanding  diluted |  |                            | 20,438 |             |  |  | 19,214 | 
|                                                     |  |                            |        |             |  |  |        | 

STOCK-BASED COMPENSATION

We use the intrinsic-value method for employee stock-based compensation
pursuant to Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees,under which no compensation cost has been recognized. We
adopted the disclosure provisions for employee stock-based compensation and the
fair-value method for non-employee stock-based compensation of SFAS No. 123.
Had compensation cost for the stock option plans been determined consistent
with SFAS No. 123, Accounting for Stock-Based Compensation,our net loss and
basic and diluted loss per share would have been reduced to the following pro
forma amounts (in thousands, except per share amounts):

|                                               |                                            |   |                            |         |             |   |      |         |  
|---------------------------------------------- | ------------------------------------------ | - | -------------------------- | ------- | ----------- | - | ---- | ------- | -
|                                               |                                            |   | For the three months ended
|                                               |                                            |   |                           
|                                               |                                            |   | May 3, 2003                |         | May 4, 2002
|                                               |                                            |   |                            |         |            
|Net Loss:                                      |                                            |   |                            |         |             |   |      |        
|                                               | As reported                                |   | $                          | (12,737 | )           |   | $    | (39,244 | )
|                                               | Stock option and purchase plans            |   |                            | (400    | )           |   |      | (388    | )
|                                               |                                            |   |                            |         |             |   |      |         |  
|                                               | Pro forma loss                             |   | $                          | (13,137 | )           |   | $    | (39,632 | )
|                                               |                                            |   |                            |         |             |   |      |        
|Basic and diluted loss per share:              |                                            |   |                            |         |             |   |      |        
|                                               | As reported                                |   | $                          | (0.62   | )           |   | $    | (2.04   | )
|                                               | Stock option and purchase plans            |   |                            | (0.02   | )           |   |      | (0.02   | )
|                                               |                                            |   |                            |         |             |   |      |         |  
|                                               | Pro forma basic and diluted loss per share |   | $                          | (0.64   | )           |   | $    | (2.06   | )
|                                               |                                            |   |                            |         |             |   |      |        
|Weighted average fair value of options granted |                                            | $ | 2.02                       |         |             | $ | 6.50 |        

The proforma amounts shown above may not be indicative of the effects on
reported net loss.

The fair value of each option granted is estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions
used for grants in 2003 and 2002:

|     |  |                  |     |          |  |          |     |            |  |  |     |  |  |  |      |  
|---- |  | ---------------- | --- | -------- |  | -------- | --- | ---------- |  |  | --- |  |  |  | ---- | -
|     |  | Weighted average |     | Dividend |  | Expected |     | Expected  
|     |  | risk free rate   |     | yield    |  | lives    |     | volatility
|     |  |                  |     |          |  |          |     |           
|2003 |  |                  | 3.0 | %        |  |          | 0.0 | %          |  |  | 5.0 |  |  |  | 55.2 | %
|2002 |  |                  | 2.0 | %        |  |          | 0.0 | %          |  |  | 6.5 |  |  |  | 52.6 | %

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 143, Accounting for Asset Retirement Obligations,which requires that
the fair value of a liability for an asset retirement obligation be recognized
in the period in which it is incurred if a reasonable estimate of fair value
can be made. The associated asset retirement costs would be capitalized as

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part of the carrying amount of the long-lived asset and depreciated over the
life of the asset. The liability is accreted at the end of each period through
charges to operating expense. If the obligation is settled for other than the
carrying amount of the liability, a company will recognize a gain or loss on
settlement. The provisions of SFAS No. 143 are effective for fiscal years
beginning after June 15, 2002. The Company adopted SFAS No. 143 during the
first quarter of fiscal 2003 with no material impact on the Companys
consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections as of April 2002,which is effective for fiscal years beginning
after May 15, 2002. SFAS No. 145 rescinds SFAS No. 4, which required that all
gains and losses from extinguishment of debt be aggregated, and if material,
classified as an extraordinary item. As a result, gains and losses from debt
extinguishment are to be classified as extraordinary only if they meet the
criteria set forth in Accounting Principles Board Opinion No. 30, Reporting the
Results of OperationsReporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions.SFAS No. 145 also requires that sale/leaseback accounting be
used for capital lease modifications with economic effects similar to
sale/leaseback transactions. The Company implemented SFAS No. 145 in the first
quarter of fiscal 2003. There were no extraordinary losses on early
extinguishment of debt requiring reclassification in the Companys consolidated
statement of operations for all periods presented.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
CompensationTransition and Disclosure,an amendment of SFAS No. 123. The
purpose of the amendment is to enable companies that choose to adopt the
fair-value based method of accounting for stock-based compensation to report
the full effect of employee stock options in their financial statements
immediately upon adoption. The Company will continue to apply the
disclosure-only provisions of SFAS No. 123. The transition provisions are
effective for fiscal years ending after December 15, 2002. The Company adopted
the annual disclosure provision of SFAS No. 148 in fiscal 2002. The interim
disclosure provisions were adopted in the first quarter of fiscal 2003.

In January 2003, the FASB published Interpretation No. 46, Consolidation
of Variable Interest Entities,which the Company refers to as FIN 46, to
clarify the conditions under which assets, liabilities and activities of
another entity should be consolidated into the financial statements of a
company. FIN 46 requires the consolidation of a variable interest entity
(including a special purpose entity such as that
utilized in an accounts receivable securitization transaction) by a
company that bears the majority of the risk of loss from the variable interest
entitys activities or is entitled to receive a majority of the variable
interest entitys residual returns or both. The provisions of FIN 46 are
required to be adopted in fiscal 2003. The Company does not believe the
adoption of FIN 46 will have a material impact on its consolidated financial
statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity.
This statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or asset in some circumstances). Many of
those instruments were previously classified as equity. The statement is
effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The Company does not expect that this statement
will have a material impact on its consolidated financial statements.

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3. DISCONTINUED OPERATIONS

In November 2002, the Company decided to liquidate the Travel
Subsidiaries, which consisted of 135 stores, due to their large operating
losses. In accordance with SFAS No. 144, the Travel Subsidiaries have been
presented as a discontinued operation effective November 19, 2002, and the
consolidated financial statements were reclassified to segregate the assets,
liabilities and operating results of the Travel Subsidiaries for all periods
presented.

Beginning on November 19, 2002, and continuing through the fourth quarter
of 2002, the Company liquidated the inventory and fixed assets of the Travel
Subsidiaries. The Travel Subsidiaries and certain of their affiliates entered
into an Agency Agreement with a joint venture comprised of Hilco Merchant
Resources, LLC and Hilco Real Estate, LLC (collectively Hilco) to liquidate
the inventory in such stores and exit the store leases. Pursuant to the Agency
Agreement, Hilco paid the Company a guaranteed amount of 85% of the cost value
of the inventory, subject to certain adjustments. Hilco was responsible for
all expenses related to the sale. In addition, Hilco assisted in negotiations
to exit certain leases.

The following represents the summary operating results of the Travel
Subsidiaries presented as discontinued operations (in thousands):

|                                             |  |             |   |             |  |   |        |  
|-------------------------------------------- |  | ----------- | - | ----------- |  | - | ------ | -
|                                             |  | May 3, 2003 |   | May 4, 2002
|                                             |  |             |   |            
|Net sales                                    |  | $           |  |             |  | $ | 24,204 |  
|                                             |  |             |   |             |  |   |        |  
|Loss before income taxes                     |  |             |  |             |  |   | (7,053 | )
|                                             |  |             |   |             |  |   |        |  
|Loss from discontinued operations            |  | $           |  |             |  | $ | (4,232 | )
|                                             |  |             |   |             |  |   |        |  
|Loss before income taxes, per share          |  | $           |  |             |  | $ | (0.37  | )
|                                             |  |             |   |             |  |   |        |  
|Loss from discontinued operations, per share |  | $           |  |             |  | $ | (0.22  | )
|                                             |  |             |   |             |  |   |        |  

The current and noncurrent assets and liabilities of the Travel
Subsidiaries as of May 3, 2003, and February 1, 2003, were as follows (in
thousands):

|                                               |  |             |        |                  |  |   |         |  
|---------------------------------------------- |  | ----------- | ------ | ---------------- |  | - | ------- | -
|                                               |  | May 3, 2003 |        | February 1, 2003
|                                               |  |             |        |                 
|Cash and cash equivalents                      |  | $           | 10     |                  |  | $ | 882     |  
|Accounts receivable, net                       |  |             | 83     |                  |  |   | 104     |  
|Other current assets                           |  |             |       |                  |  |   | 2,393   |  
|                                               |  |             |        |                  |  |   |         |  
|Current assets of discontinued operations      |  | $           | 93     |                  |  | $ | 3,379   |  
|                                               |  |             |        |                  |  |   |         |  
|Total assets of discontinued operations        |  | $           | 93     |                  |  | $ | 3,379   |  
|                                               |  |             |        |                  |  |   |         |  
|Accounts payable                               |  | $           |       |                  |  | $ | 590     |  
|Accrued expenses                               |  |             | 1,872  |                  |  |   | 14,485  |  
|                                               |  |             |        |                  |  |   |         |  
|Current liabilities of discontinued operations |  | $           | 1,872  |                  |  | $ | 15,075  |  
|                                               |  |             |        |                  |  |   |         |  
|Total liabilities of discontinued operations   |  | $           | 1,872  |                  |  | $ | 15,075  |  
|                                               |  |             |        |                  |  |   |         |  
|Net liabilities of discontinued operations     |  | $           | (1,779 | )                |  | $ | (11,696 | )
|                                               |  |             |        |                  |  |   |         |  

In May 2003, the Company sold its Miami, Florida distribution center for
net proceeds of $2.5 million. This facility was an asset acquired in the
Bentleys Luggage
Corp. acquisition. The $2.4 million in net assets held for sale had been
reported as Current assets of discontinued operations at February 1, 2003.
The net proceeds from the sale decreased cash used by discontinued operations
for the period.

The following summarizes the Travel Subsidiaries disposal reserve
activity during the three months ended May 3, 2003 (in thousands):

Discontinued operations reserves

|                                             |  |                  |        |       |  |           |          |             |  |   |      |   |  |   |       | 
|-------------------------------------------- |  | ---------------- | ------ | ----- |  | --------- | -------- | ----------- |  | - | ---- | - |  | - | ----- | 
|                                             |  | February 1, 2003 |        | Usage |  | Transfers |          | May 3, 2003
|                                             |  |                  |        |       |  |           |          |            
|Store closing*                               |  | $                | 12,653 |       |  |           | ($11,315 | )           |  | $ | 269  |   |  | $ | 1,607 | 
|Taxes                                        |  |                  | 720    |       |  |           | (502     | )           |  |   |     |   |  |   | 218   | 
|Severance                                    |  |                  | 600    |       |  |           | (563     | )           |  |   |     |   |  |   | 37    | 
|Miscellaneous                                |  |                  | 512    |       |  |           | (371     | )           |  |   | (131 | ) |  |   | 10    | 
|Accounts payable                             |  |                  | 590    |       |  |           | (452     | )           |  |   | (138 | ) |  |   |      | 
|                                             |  |                  |        |       |  |           |          |             |  |   |      |   |  |   |       | 
|Total liabilities of discontinued operations |  | $                | 15,075 |       |  |           | ($13,203 | )           |  | $ | 0    |   |  | $ | 1,872 | 
|                                             |  |                  |        |       |  |           |          |             |  |   |      |   |  |   |       | 



---

|* |  | Includes primarily lease termination costs and legal fees associated with the liquidation of the Travel Subsidiaries.
|- |  | ---------------------------------------------------------------------------------------------------------------------

4. OTHER COMPREHENSIVE LOSS

The Company reports accumulated other comprehensive loss as a separate
item in the shareholders equity section of the balance sheet. Other
comprehensive loss consists of foreign currency translation adjustments. For
the quarters ending May 3, 2003, and May 4, 2002, the comprehensive loss was de
minimis.

5. LONG-TERM DEBT

Long-term debt at May 3, 2003, and February 1, 2003 consists of the
following (in thousands):

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|                       |  |             |        |                  |  |   |        |  
|---------------------- |  | ----------- | ------ | ---------------- |  | - | ------ | -
|                       |  | May 3, 2003 |        | February 1, 2003
|                       |  |             |        |                 
|Senior notes           |  | $           | 30,590 |                  |  | $ | 30,590 |  
|Term B promissory note |  |             | 25,000 |                  |  |   | 25,000 |  
|Note payable           |  |             | 139    |                  |  |   | 150    |  
|                       |  |             |        |                  |  |   |        |  
|Total debt             |  | $           | 55,729 |                  |  | $ | 55,740 |  
|Less: current portion  |  |             | (45    | )                |  |   | (45    | )
|                       |  |             |        |                  |  |   |        |  
|Total long-term debt   |  | $           | 55,684 |                  |  | $ | 55,695 |  
|                       |  |             |        |                  |  |   |        |  

SENIOR NOTES

On
August 18, 1997, the Company issued $75.0 million of
11 1/4% senior
notes due August 15, 2004, (the 11 1/4% Senior Notes). Interest on the
11 1/4% Senior Notes is payable semiannually in arrears on February 15 and
August 15 of each year. The Company repurchased
$44.4 million of the 11 1/4%
Senior Notes in the years 1998 through 2000. As of May 3, 2003, the
outstanding balance on the 11 1/4% Senior Notes was $30.6 million.

The
11 1/4% Senior Notes are general unsecured obligations that rank
senior in right of payment to all existing and future subordinated indebtedness
and rank on equal terms in right of payment with all other current and future
unsubordinated indebtedness. The indenture governing the 11 1/4% Senior Notes
contains numerous operating covenants that limit the discretion of management
with respect to certain business matters and that place significant
restrictions on, among other things, the ability of the Company to incur
additional indebtedness, to create liens or other encumbrances, to declare or
pay any dividend, to make certain payments or investments, loans and
guarantees, and to sell or otherwise dispose of assets and merge or consolidate
with another entity. At May 3, 2003, the Company was in compliance with all
covenants of the 11 1/4% Senior Notes.

TERM B PROMISSORY NOTE AND REVOLVING CREDIT AGREEMENT

General Electric Capital Corporation and a syndicate of banks have
provided us with a senior credit facility, which was amended on April 11, 2003,
that provides for borrowings of up to $205 million in aggregate principal
amount, including a $25 million Term B promissory note and a $75 million letter
of credit subfacility. The maximum amount available under the revolving credit
portion of the senior credit facility is limited to:

     85% of net inventories, provided that such percentage at no time may
exceed 85% of the then applicable discount rate applied in appraising such
inventories to reflect their value as if sold in an orderly liquidation, except
that the discount rate is gradually increased from August 17 to October 1 of
each year and gradually decreased from December 17 to February 1 of each year;

     plus 85% of outstanding and undrawn trade letters of credit, provided
that such percentage at no time may exceed 85% of the discount rate applied in
appraising the future inventories related to such letters of credit to reflect
their value as if sold in an orderly liquidation;

     plus 85% of credit card receivables;

     plus,
during the months of September, October and November and the first
fifteen days of December, 2003 (or until we receive our anticipated tax refund,
whichever is earlier), 85% of the amount we expect to receive as a tax refund,
provided that prior to the filing of our tax return, such amount cannot exceed
$2 million during the first week of September, $4 million during the second
week of September or $6 million at any time after the second week of September;
and provided further that after we file our tax return such amount cannot
exceed $15.0 million;

     minus $10 million ($5 million from July 2003 through December 15, 2003,
and during the months of August, September, October and November of 2004 and
2005).

In addition, borrowings under the senior credit facility are subject to the
further limitations that:

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     the revolving credit portion of such borrowings cannot exceed the sum of
85% of credit card receivables, plus 85% of the appraised value of inventory
(including inventory subject to trade letters of credit) as if sold on a
going-out-of business basis; and

     the total borrowings (i.e. the revolving credit portion of the facility
and the Term B promissory note) cannot exceed the sum of 85% of the book value
of credit card receivables, plus 95% (100% during August, September and
October) of the appraised value of inventory (including inventory subject to
trade letters of credit) as if sold on a going-out-of business basis;

     from December 31, 2003, through March 31, 2004, we must have
no borrowings under the revolving credit portion of the facility and
outstanding letters of credit must be no greater than $20 million;

     from April 1, 2004, through May 15, 2004, borrowings under
the revolving credit portion of the facility must be no greater than
$15 million, and outstanding letters of credit must be no greater
than $20 million; and

     from December 31, 2004, through March 31, 2005, we must have
no borrowings under the revolving credit portion of the facility and
outstanding letters of credit must be no greater than $40 million.

Interest is payable on revolving credit borrowings at variable rates
determined by LIBOR plus 3.25%, except as noted in the next sentence, or the
prime rate plus 2.0% (commercial paper rate plus 3.25% if the loan is made
under the swing line portion of the revolver). Borrowings in an amount that
is available to us only because we have included our anticipated tax refund in
determining availability will bear interest at the prime rate plus 5%.
Interest is payable on the $25 million Term B promissory note at a variable
rate equal to the prime rate plus 4%, plus an additional 5% payable pursuant
to a separate letter agreement with General Electric Capital Corporation. We
pay monthly fees on the unused portion of the senior credit facility and on the
average daily amount of letters of credit outstanding during each month. If we
have any borrowings that are only available to us because we have included our
anticipated tax refund in determining availability, we will pay a fee of
$150,000. The senior credit facility expires in June 2005, at which time all
borrowings, including the Term B promissory note, become due and payable.
Prepayment of the Term B promissory note is subject to a 2% prepayment fee if
prepaid on or after July 1, 2002, but on or prior to November 30, 2003, and a
1% prepayment fee thereafter. The revolving credit portion of the facility is
subject to a 1% prepayment fee under most circumstances. The Term B promissory
note is prepayable on or after July 1, 2002, only with the consent of the
senior lenders under the senior credit facility.

At May 3, 2003, and February 1, 2003, there were no borrowings under the
revolver, and there were $9.4 and $15.2 million in letters of credit
outstanding, respectively. The Term B promissory note had a balance of $25.0
million on May 3, 2003, and February 1, 2003.

6. SUPPLEMENTAL BALANCE SHEET INFORMATION

|                                |                                        |                                      |   |         |         |             |   |         |         | 
|------------------------------- | -------------------------------------- | ------------------------------------ | - | ------- | ------- | ----------- | - | ------- | ------- | 
|                                |                                        |                                      |   | May 3,  |         | February 1,
|(in thousands)                  |                                        | 2003                                 |   | 2003   
|                                |                                        |                                      |   |        
|Accounts receivable, net:       |                                        |                                      |   |         |         |             |   |        
|                                | Trade receivables                      |                                      | $ | 2,535   |         |             | $ | 3,851   |        
|                                | Other receivables                      |                                      |   | 2,220   |         |             |   | 1,524   |        
|                                |                                        |                                      |   |         |         |             |   |         |        
|                                |                                        | Total                                |   |         | 4,755   |             |   |         | 5,375   | 
|                                | Less  Allowance for doubtful accounts |                                      |   | (147    | )       |             |   | (145    | )      
|                                | Less  Deferred sales                  |                                      |   | (31     | )       |             |   | (68     | )      
|                                |                                        |                                      |   |         |         |             |   |         |        
|                                |                                        | Total accounts receivable, net       |   | $       | 4,577   |             |   | $       | 5,162   | 
|                                |                                        |                                      |   |         |         |             |   |        
|Inventories:                    |                                        |                                      |   |         |         |             |   |        
|                                | Raw materials                          |                                      | $ | 2,418   |         |             | $ | 2,872   |        
|                                | Finished goods                         |                                      |   | 86,110  |         |             |   | 115,829 |        
|                                |                                        |                                      |   |         |         |             |   |         |        
|                                |                                        | Total inventories                    |   | $       | 88,528  |             |   | $       | 118,701 | 
|                                |                                        |                                      |   |         |         |             |   |        
|Property and equipment, net:    |                                        |                                      |   |         |         |             |   |        
|                                | Land                                   |                                      | $ | 200     |         |             | $ | 200     |        
|                                | Equipment and furniture                |                                      |   | 90,593  |         |             |   | 90,111  |        
|                                | Leasehold improvements                 |                                      |   | 32,948  |         |             |   | 32,934  |        
|                                |                                        |                                      |   |         |         |             |   |         |        
|                                |                                        | Total                                |   |         | 123,741 |             |   |         | 123,245 | 
|                                | Less  Accumulated depreciation        |                                      |   | (52,170 | )       |             |   | (49,271 | )      
|                                |                                        |                                      |   |         |         |             |   |         |        
|                                |                                        | Total property and equipment, net    |   | $       | 71,571  |             |   | $       | 73,974  | 
|                                |                                        |                                      |   |         |         |             |   |        
|Goodwill and other assets, net: |                                        |                                      |   |         |         |             |   |        
|                                | Goodwill                               |                                      | $ | 72      |         |             | $ | 72      |        
|                                | Debt issuance costs                    |                                      |   | 7,002   |         |             |   | 5,977   |        
|                                | Other assets                           |                                      |   | 189     |         |             |   | 245     |        
|                                |                                        |                                      |   |         |         |             |   |        
|                                |                                        | Total                                |   |         | 7,263   |             |   |         | 6,294   | 
|                                | Less  Accumulated amortization        |                                      |   | (3,346  | )       |             |   | (2,979  | )      
|                                |                                        |                                      |   |         |         |             |   |         |        
|                                |                                        | Total goodwill and other assets, net |   | $       | 3,917   |             |   | $       | 3,315   | 
|                                |                                        |                                      |   |         |         |             |   |        

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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 our wholly owned
subsidiaries should be read in conjunction with our most recent audited
consolidated financial statements and related notes included in our 2002 Annual
Report on Form 10-K.

The consolidated financial statements for all periods present the Travel
Subsidiaries segment as discontinued operations. See Note 3 to the
Consolidated
Financial Statements (Unaudited) contained herein. Unless otherwise indicated,
the following discussion relates only to Wilsons Leathers continuing
operations.

OVERVIEW

We are the leading specialty retailer of quality leather outerwear,
accessories and apparel in the United States. Our multiple store formats are
designed to reach a broad customer base with a superior level of customer
service. Utilizing our integrated worldwide leather sourcing network and
in-house design capabilities, we are consistently able to provide our customers
high-quality, fashionable merchandise at attractive prices and minimize fashion
risk by reacting quickly to popular and emerging fashion trends and customer
preferences and rapidly replenishing fast-selling merchandise.

At May 3, 2003, we operated a total of 612 permanent retail stores located
in 45 states, the District of Columbia and Canada, including 478 mall stores,
111 outlet stores and 23 airport stores. Each year we supplement our permanent
stores with seasonal stores during our peak selling season, which totaled 284
in 2002. We plan to open approximately 225 seasonal stores in 2003.

Our Wilsons Leather mall stores average approximately 2,600 total leased
square feet and feature a large assortment of both classic and fashion-forward
leather outerwear, accessories and apparel. Our outlet stores are operated
primarily under the Wilsons Leather Outlet name, average approximately 3,900
total leased square feet, and offer a combination of clearance-priced
merchandise from our mall stores, special outlet-only merchandise and key
in-season goods. Our airport stores average approximately 700 total leased
square feet, feature travel products as well as leather accessories, and
provide us the opportunity to showcase our products and the Wilsons Leather
brand to millions of potential customers each year in some of the worlds
busiest airports. Our proprietary labels, including M. Julian®, Maxima®, Pelle
Studio® and Wilsons Leather, are positioned to appeal to identified customer
lifestyle segments.

Comparable store sales were flat in the three months ended May 3, 2003,
compared to a decrease of 8.4% in the same period of the prior year. A store
is included in the comparable store sales calculation after it has been opened
and operated by us for more than 52 weeks. The percentage change is computed
by comparing total net sales for comparable stores as thus defined at the end
of the applicable reporting period with total net sales from comparable stores
for the comparable period in the prior year.

CRITICAL ACCOUNTING POLICIES

We consider our critical accounting policies to be those related to
inventories and property and equipment impairment as discussed in the section
with this title in Item 7, Managements Discussion and Analysis of Financial
Condition and Results of Operations that appears on page 22 of our Annual
Report on Form 10-K for the year ended February 1, 2003. No material changes
occurred to these policies in the periods covered by this report.

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 3, 2003 COMPARED TO THE
THREE MONTHS ENDED MAY 4, 2002

Net sales increased 0.3% to $95.3 million in the three months ended May 3,
2003, from $95.1 million in the comparable period last year. The $0.2 million
sales increase was due to sales in new stores. Restricted sales growth was
partially due to the decrease in mall traffic attributable, in part, to the war
in Iraq.

We opened 5 stores and closed 11 stores in the period ended May 3, 2003,
compared to opening 11 stores and closing 10 stores in the comparable period
last year. As of May 3, 2003, we operated 612 stores compared to 620 stores at
May 4, 2002.

Cost of goods sold, buying and occupancy costs increased to 81.0% as a
percentage of net sales in 2003, from 76.9% of net sales in 2002, primarily due
to an increase in markdowns representing 4.5% of sales. The 4.1% increase in
cost of goods sold, buying and occupancy costs as a percentage of sales
translates into a $4.1 million increase over 2002. This $4.1 million increase
from 2002 was due to: (1) $4.4 million in higher markdowns to clear fall
merchandise, (2) $0.4 million in higher buying and occupancy costs, resulting
primarily from the sale-leaseback of the Brooklyn Park, Minnesota distribution
center, which did not occur until the second quarter of 2002, (3) a $0.4
million increase in freight and handling costs, primarily due to the
reallocation of clearance inventory, partially offset by (4) $1.1 million in
lower cost of goods sold costs due to higher margin goods being sold in 2003
compared to 2002.

Selling, general and administrative expenses decreased to $32.8 million in
2003 from $33.9 million in 2002, and decreased as a percentage of net sales to
34.4% from 35.6%. The $1.1 million decrease was primarily due to: (1) a $0.5
million decrease in store selling expenses, including, but not limited to
payroll expense, and (2) cost savings realized due to organizational
restructuring.

Depreciation and amortization increased to $4.3 million in 2003 from $3.8
million in 2002, and increased as a percentage of net sales to 4.5% from 4.0%.
The increase resulted from depreciation on a higher base of assets resulting
from recent additions and from accelerated depreciation of $0.3 million of
assets related to stores we plan to close later in 2003.

As a result of the above, operating loss increased to a net loss of $19.0
million, or 19.9% of net sales in 2003 from a loss of $15.7 million, or 16.5%
of net sales in 2002.

Net interest expense increased to $2.3 million in 2003 from $1.7 million
in 2002 due to higher interest rates on long-term debt and higher debt
acquisition costs.

The income tax benefit was $8.5 million in 2003 compared to $7.0 million
in 2002. The effective rate of 40% remained constant from 2002 to 2003.

Net loss from continuing operations for 2003 was $12.7 million compared to
$10.4 million in 2002.

Loss from discontinued operations was $0.0 million in 2003 compared to
$4.2 million in 2002.

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CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE

On February 3, 2002, new accounting rules for business combinations and
accounting for goodwill and other intangibles, SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, became
effective for the Company. As a result and from that day forward, goodwill is
no longer amortized against earnings and goodwill balances are subject to
impairment review on at least an annual basis.

Under the transitional provisions of SFAS No. 142, the Companys goodwill
related to the Travel Subsidiaries was tested for impairment during the second
quarter of 2002 using a February 2, 2002 measurement date. Each of the
Companys reporting units was tested for impairment by comparing the fair value
of each reporting unit with its carrying value. A reporting unit is the same
as, or one level below an operating segment. For purposes of our Company,
reporting units were defined as Wilsons and Travel at that time. Fair value
was determined based on a valuation study performed by an independent third
party which primarily considered the discounted cash flow method, guideline
company (comparable companies) and similar transaction methods. As a result
of the Companys impairment test, the Company recorded a pretax impairment loss
to reduce the carrying value of goodwill of the Travel segment by $26.3 million
to its implied fair value. Impairment was due to a combination of factors
including acquisition price, post-acquisition capital expenditures and
operating performance.

The cumulative effect of this accounting change, net of a $1.7 million tax
benefit, was originally reported in the Companys Statement of Operations for
the six months ended August 3, 2002. The financial statements presented for
the three months ended May 4, 2002 have been revised to reflect the $24.6
million net charge as the cumulative effect of a change in accounting principle
in the three months ended May 4, 2002, as required by SFAS No. 142.

LIQUIDITY AND CAPITAL RESOURCES

Our capital requirements are primarily driven by our seasonal working
capital needs, investments in new stores, remodeling existing stores, enhancing
information systems and increasing capacity for our distribution centers. Our
peak working capital needs typically occur during the period from August
through early December as inventory levels are increased in advance of our peak
selling season from October through January.

Our future capital requirements depend on the sustained demand for our
leather products. Many factors affect the level of consumer spending on our
products, including, among others, general business conditions, interest rates,
the availability of consumer credit, weather, the outbreak of war, acts of
terrorism or the threat of either, other significant national and international
events, taxation and consumer confidence in future economic conditions.
Consumer purchases of discretionary items, such as our leather products, tend
to decline during recessionary periods when disposable income is lower. The
general slowdown in the United States economy and the uncertain economic
outlook have adversely affected consumer spending habits and mall traffic,
causing us to delay our expansion plans, resulting in lower net sales than
expected on a quarterly and annual basis.

Our ability to meet our debt service obligations will be dependent upon
our future performance, which will be subject to general economic conditions
and financial, business and other factors affecting our operations. If we are
unable to generate sufficient cash flow from operations in the future to
service our debt, we may be required to refinance all or a portion of existing
debt or to obtain additional financing. There can be no assurance that any
such refinancing or additional financing would be possible or could be obtained
on terms that are favorable to us.

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General Electric Capital Corporation and a syndicate of banks have
provided us with a senior credit facility, which was amended on April 11, 2003,
that provides for borrowings of up to $205 million in aggregate principal
amount, including a $25 million Term B promissory note and a $75 million letter
of credit subfacility. The maximum amount available under the revolving credit
portion of the senior credit facility is limited to:

     85% of net inventories, provided that such percentage at no time may
exceed 85% of the then applicable discount rate applied in appraising such
inventories to reflect their value as if sold in an orderly liquidation, except
that the discount rate is gradually increased from August 17 to October 1 of
each year and gradually decreased from December 17 to February 1 of each year;

     plus 85% of outstanding and undrawn trade letters of credit, provided
that such percentage at no time may exceed 85% of the discount rate applied in
appraising the future inventories related to such letters of credit to reflect
their value as if sold in an orderly liquidation;

     plus 85% of credit card receivables;

     plus, during the months of September, October and November and the first
fifteen days of December, 2003 (or until we receive our anticipated tax refund,
whichever is earlier), 85% of the amount we expect to receive as a tax refund,
provided that prior to the filing of our tax return, such amount cannot exceed
$2 million during the first week of September, $4 million during the second
week of September or $6 million at any time after the second week of September;
and provided further that after we file our tax return such amount cannot
exceed $15.0 million;

     minus $10 million ($5 million from July 2003 through December 15, 2003,
and during the months of August, September, October and November of 2004 and
2005).

In addition, borrowings under the senior credit facility are subject to the
further limitations that:

     the revolving credit portion of such borrowings cannot exceed the sum of
85% of credit card receivables, plus 85% of the appraised value of inventory
(including inventory subject to trade letters of credit) as if sold on a
going-out-of business basis; and

     the total borrowings (i.e. the revolving credit portion of the facility
and the Term B promissory note) cannot exceed the sum of 85% of the book value
of credit card receivables, plus 95% (100% during August, September and
October) of the appraised value of inventory (including inventory subject to
trade letters of credit) as if sold on a going-out-of business basis;

     from December 31, 2003, through March 31, 2004, we must have
no borrowings under the revolving credit portion of the facility and
outstanding letters of credit must be no greater than $20 million;

     from April 1, 2004, through May 15, 2004, borrowings under
the revolving credit portion of the facility must be no greater than
$15 million, and outstanding letters of credit must be no greater
than $20 million; and

     from December 31, 2004, through March 31, 2005, we must have
no borrowings under the revolving credit portion of the facility and
outstanding letters of credit must be no greater than $40 million.

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As of May 3, 2003, we had no borrowings under the senior credit facility,
except for the Term B promissory note, and we had $9.4 million in outstanding
letters of credit.

Interest is payable on revolving credit borrowings at variable rates
determined by LIBOR plus 3.25%, except as noted in the next sentence, or the
prime rate plus 2.0% (commercial paper rate plus 3.25% if the loan is made
under the swing line portion of the revolver). Borrowings in an amount that
is available to us only because we have included our anticipated tax refund in
determining availability will bear interest at the prime rate plus 5%.
Interest is payable on the $25 million Term B promissory note at a variable
rate equal to the prime rate plus 4%, plus an additional 5% payable pursuant
to a separate letter agreement with General Electric Capital Corporation. We
pay monthly fees on the unused portion of the senior credit facility and on the
average daily amount of letters of credit outstanding during each month. If we
have any borrowings that are only available to us because we have included our
anticipated tax refund in determining availability, we will pay a fee of
$150,000. The senior credit facility expires in June 2005, at which time all
borrowings, including the Term B promissory note, become due and payable.
Prepayment of the Term B promissory note is subject to a 2% prepayment fee if
prepaid on or after July 1, 2002, but on or prior to November 30, 2003, and a
1%
prepayment fee thereafter. The revolving credit portion of the facility is
subject to a 1% prepayment fee under most circumstances. The Term B promissory
note is prepayable on or after July 1, 2002, only with the consent of the
senior lenders under the senior credit facility.

The senior credit facility contains certain restrictions and covenants
which, among other things, restrict our ability to make capital expenditures;
acquire or merge with another entity; make investments, loans or guarantees;
incur additional indebtedness; prepay, repurchase or pay any principal on any
11 1/4% Senior Notes except pursuant to a permitted refinancing; create liens
or other encumbrances; or pay cash dividends or make other distributions. We
are currently in compliance with all covenants under the senior credit
facility.

The senior credit facility also contains a requirement that we either
amend, refund, renew, extend or refinance the outstanding 11 1/4% Senior Notes
on or before June 15, 2004, so that no principal payment with respect to any
such amended, refunded, renewed, extended or refinanced notes is due on or
before September 1, 2005. We are required to provide our lenders a plan for
achieving such amendment, refunding, renewal, extension or refinancing by April
30, 2004. The terms of any refunded, renewed, extended or refinanced notes
cannot be more burdensome than the terms of the 11 1/4% Senior Notes and the
rate of interest with respect to any such notes cannot exceed the sum of the
rate of interest on United States treasury obligations of like tenor at the
time of such refunding, renewal, refinancing or extension plus 7% per annum.

We plan to use the senior credit facility for our immediate and future
working capital needs. Peak borrowings typically occur from October through
December and outstanding letters of credit typically peak from August through
September. We are dependent on the senior credit facility to fund working
capital and letter of credit needs. We believe that borrowing capacity under
the senior credit facility, together with current and anticipated cash flow
from operations, will be adequate to meet our working capital and capital
expenditure requirements during the term of the senior credit facility,
provided that we either amend, refund, renew, extend or refinance the
outstanding 11 1/4% Senior Notes on or before June 15, 2004, so that no
principal payment with respect to any such amended, refunded, renewed, extended
or refinanced notes is due on or before September 1, 2005.

On August 18, 1997, we completed a private offering of $75 million of
11 1/4% Senior Notes, referred to in Note 5 to our Consolidated Financial
Statements (Unaudited), to certain institutional

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buyers. Interest on the
11 1/4% Senior Notes is payable semi-annually in arrears on February 15 and
August 15 of each year. The 11 1/4% Senior Notes mature on August 15, 2004
and are callable after August 15, 2001, at a defined premium. The 11 1/4%
Senior Notes are our general unsecured obligations and rank senior in right of
payment to all of our existing and future subordinated indebtedness and rank on
equal terms in right of payment with all of our other current and future
unsubordinated indebtedness. During 2000 and 1999, we repurchased $13.3 million
and $26.1 million, respectively, of our 11 1/4% Senior Notes. As of May 3,
2003, we had $30.6 million of our 11 1/4% Senior Notes outstanding.

In January 2002, we sold 1,900,000 shares of common stock to an
institutional investor in a private placement for a price of $11.00 per share
for net proceeds of approximately $20.0 million. In April 2002, affiliates of
the institutional investor exercised the option to purchase 100,000 shares of
our common stock at a purchase price of $11.00 per share. The sale was
completed on April 12, 2002, for net proceeds of approximately $1.0 million.

On April 30, 2002, we sold 900,000 shares of our common stock in a private
placement at a purchase price of $11.00 per share, for net proceeds of
approximately $9.9 million. On June 10, 2002, the purchasers in the April
private placement exercised the option to purchase an additional 100,000 shares
of our common stock at a purchase price of $11.00 per share. The sale was
completed on June 13, 2002, for net proceeds of approximately $1.1 million.

On June 21, 2002, we completed a sale-leaseback transaction for our
headquarters facility and distribution center in Brooklyn Park, Minnesota, for
net proceeds of $12.5 million. A portion of the net proceeds from the
sale-leaseback, $4.8 million, was used to pay down the Term B promissory note
from $25.0 million to $20.2 million. The remainder of the proceeds was used
for general corporate purposes.

On November 4, 2002, pursuant to the First Amendment to Fourth Amended and
Restated Credit Agreement with General Electric Capital Corporation and the
syndicate, we reborrowed $4.8 million of the Term B promissory note, which
brought the outstanding balance to $25.0 million.

On November 19, 2002, we announced the liquidation of the stores operated
by our Travel Subsidiaries, as described in Note 3 to the Consolidated
Financial Statements on page F-14 of our 2002 Annual Report on Form 10-K. See
also Note 3 of the Consolidated Financial Statements (Unaudited) contained
herein.

CASH FLOW ANALYSIS

Operating activities of continuing operations for the three months ended
May 3, 2003, resulted in cash provided of $3.5 million compared to cash used of
$16.9 million in the corresponding period of 2002.

The $3.5 million of cash provided by operating activities was comprised
of: (1) a $30.2 million decrease in inventories due to clearance sales, (2) an
$8.8 million increase in deferred tax liabilities, (3) a $4.7 million non-cash
adjustment for depreciation and amortization expense, (4) $0.6 million in cash
provided by various other operating activities, offset by (5) a net loss from
continuing operations of $12.7 million, (6) a $5.7 million increase in prepaids
due to timing of rent payments, (7) a $7.4 million increase in income taxes
refundable/payable and other liabilities primarily due to net operating losses,
including a $9.9 million tax refund, and (8) a $15.0 million decrease in
accrued expenses and accounts payable due to the seasonality of the business.

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We had $16.9 million in cash used by operating activities during the same
period last year as a result of: (1) $4.1 million in non-cash adjustments for
depreciation and amortization and loss on disposal of assets, (2) $0.1 million
in cash provided by various other operating activities, (3) a $1.8 million
decrease in accounts receivable, (4) a $15.9 million decrease in inventories,
offset by (5) a net loss from continuing operations of $10.4 million, (6) a
$6.3 million increase in prepaid expenses due to the timing of May 2002 rent
payments, (7) a $10.3 million decrease in income taxes refundable/payable and
other liabilities due to reduced income, and (8) an $11.8 million decrease in
accounts payable and accrued expenses due to the seasonality of the business.

Investing activities of continuing operations for the three months ended
May 3, 2003, were comprised of $2.0 million in capital expenditures and
additions to other assets used primarily for the construction of new stores and
the renovation of and improvements to existing stores. Investing activities
during the same period last year were comprised of $1.8 million in capital
expenditures and additions to other assets used primarily for the construction
of new stores and the renovation of and improvements to existing stores. For
2003, capital expenditures are capped at $10.0 million.

Cash used by financing activities of continuing operations for the three
months ended May 3, 2003, was primarily $1.0 million used for debt acquisition
costs. Cash provided by financing activities during the same period last year
was $10.0 million. This included $11.3 million from the issuance of common
stock and exercise of stock options, offset by $1.3 million from debt
acquisition costs.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.

SEASONALITY AND INFLATION

A majority of our net sales and operating profit is generated in the peak
selling period from October through January, which includes the holiday selling
season. As a result, our annual operating results have been, and will continue
to be, heavily dependent on the results of our peak selling period. Net sales
are generally lowest during the period from April through July, and we
typically do not become profitable, if at all, until the fourth quarter of a
given year. Most of our stores are unprofitable during the first three
quarters. Conversely, in a typical year nearly all of our stores are
profitable during the fourth quarter, even those that may be unprofitable for
the full year. Historically, we have opened most of our stores during the last
half of the year. As a result, new mall stores opened just prior to the fourth
quarter produce profits in excess of their annualized profits since the stores
typically generate losses in the first nine months of the year.

We do not believe that inflation has had a material effect on the results
of operations during the past three years, however, there can be no assurance
that our business will not be affected by inflation in the future.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations,which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated

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asset retirement costs would be capitalized as part of the carrying amount of
the long-lived asset and
depreciated over the life of the asset. The liability is accreted at the
end of each period through charges to operating expense. If the obligation is
settled for other than the carrying amount of the liability, a company will
recognize a gain or loss on settlement. The provisions of SFAS No. 143 are
effective for fiscal years beginning after June 15, 2002. The Company adopted
SFAS No. 143 during the first quarter of fiscal 2003 with no material impact on
the Companys consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections as of April 2002,which is effective for fiscal years beginning
after May 15, 2002. SFAS No. 145 rescinds SFAS No. 4, which required that all
gains and losses from extinguishment of debt be aggregated, and if material,
classified as an extraordinary item. As a result, gains and losses from debt
extinguishment are to be classified as extraordinary only if they meet the
criteria set forth in Accounting Principles Board Opinion No. 30, Reporting the
Results of OperationsReporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions.SFAS No. 145 also requires that sale/leaseback accounting be
used for capital lease modifications with economic effects similar to
sale/leaseback transactions. The Company implemented SFAS No. 145 in the first
quarter of fiscal 2003. There were no extraordinary losses on early
extinguishment of debt requiring reclassification in the Companys consolidated
statement of operations for all periods presented.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
CompensationTransition and Disclosure,an amendment of SFAS No. 123. The
purpose of the amendment is to enable companies that choose to adopt the
fair-value based method of accounting for stock-based compensation to report
the full effect of employee stock options in their financial statements
immediately upon adoption. The Company will continue to apply the
disclosure-only provisions of SFAS No. 123. The transition provisions are
effective for fiscal years ending after December 15, 2002. The Company adopted
the annual disclosure provision of SFAS No. 148 in fiscal 2002. The interim
disclosure provisions were adopted in the first quarter of fiscal 2003.

In January 2003, the FASB published Interpretation No. 46, Consolidation
of Variable Interest Entities,which the Company refers to as FIN 46, to
clarify the conditions under which assets, liabilities and activities of
another entity should be consolidated into the financial statements of a
company. FIN 46 requires the consolidation of a variable interest entity
(including a special purpose entity such as that utilized in an accounts
receivable securitization transaction) by a company that bears the majority of
the risk of loss from the variable interest entitys activities or is entitled
to receive a majority of the variable interest entitys residual returns or
both. The provisions of FIN 46 are required to be adopted in fiscal 2003. The
Company does not believe the adoption of FIN 46 will have a material impact on
its consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity.
This statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or asset in some circumstances). Many of
those instruments were previously classified as equity. The statement is
effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The Company does not expect that this statement
will have a material impact on its consolidated financial statements.

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ITEM
3.        QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Our senior credit facility carries interest rate risk that is generally
related to LIBOR, the commercial paper rate or the prime rate. If any of those
rates were to change while we were borrowing under the facility, interest
expense would increase or decrease accordingly. As of May 3, 2003, there were
no outstanding borrowings under the senior credit facility, other than the Term
B promissory note, and we had $9.4 million in outstanding letters of credit.

We have no earnings or cash flow exposure due to market risks on our
long-term debt obligations 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 May 3, 2003, we had long-term fixed rate debt of $30.6 million maturing in
August 2004.




ITEM 4.        CONTROLS AND PROCEDURES



|(a) |  | Evaluation of Disclosure Controls and Procedures. Our chief executive
officer and our chief financial officer, after evaluating the
effectiveness of the Companys disclosure controls and procedures (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and
15-d-14(c)) as of a date (the Evaluation Date) within 90 days before the
filing date of this quarterly report, have concluded that as of the
Evaluation Date, our disclosure controls and procedures were adequate and
designed to ensure that material information relating to us and our
consolidated subsidiaries would be made known to them by others within
those entities.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Changes in Internal Controls.In the quarter ended May 3, 2003, we did
not make any significant changes in our internal controls or in other
factors that could significantly affect these controls, nor did we take
any corrective actions with regard to significant deficiencies or material
weaknesses in our internal controls.                                                                                                                                                                                                                                                                                                                               

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:
economic downturns; changes in customer shopping patterns; unseasonable
weather; failure of results of operations to meet expectations of research
analysts; risks associated with estimates made in our critical accounting
policies; risks associated with future growth; risks associated with our debt
service; change in consumer preferences and fashion trends away from leather;
seasonality of the business; risks associated with foreign sourcing and
international business; disruptions in product supplies; decreased availability
and increased cost of leather; competition in our markets; loss of key members
of our management team; reliance on third parties for maintaining our
management information systems; concentration of our common stock;
anti-takeover effects of classified board provisions in our articles of
incorporation and by-laws; volatility of our common stock; war, acts of
terrorism or the threat of either; and interruption in the operation of
corporate offices and distribution centers. Certain of these risk factors are
more fully
discussed in the Companys 2002 Annual Report on Form 10-K for the fiscal
year ended February 1, 2003.

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PART II  OTHER INFORMATION




ITEM 2.        CHANGES IN SECURITIES AND USE OF PROCEEDS

See Managements Discussion and Analysis of Financial Condition and
Results of OperationsLiquidity and Capital Resources in Part 1., Item 2., of
the document for a description of working capital restrictions and limitations
upon the payment of dividends.




ITEM 6.        EXHIBITS AND REPORT ON FORM 8-K

A.       Exhibits

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                          
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                          
|No.     |  | Description                                                                                                                                                                                                                                                                                                                                                                                                               |  | Method of Filing         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                          
|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, and the
Articles of Amendment dated May 23, 2002. (1)                                                                                                                                                                                          |  | Incorporated by Reference
|3.2     |  | Restated Bylaws of Wilsons The Leather Experts Inc. as amended June 16, 1998, January 25, 2000,
and May 23, 2002. (1)                                                                                                                                                                                                                                                                                                     |  | Incorporated by Reference
|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 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 111/4% Series A Senior Notes due 2004 and specimen Certificate of 111/4%
Series B Senior Notes due 2004. (3) |  | Incorporated by Reference
|4.3     |  | Registration Rights Agreement dated as of May 25, 1996, by and among CVS New York, Inc.
(formerly known as Melville Corporation), 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. (4)                                                                                               |  | Incorporated by Reference

23



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##### Table of Contents



|        |  |                                                                                                                                                                                                                 |  |                          
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------
|Exhibit |  |                                                                                                                                                                                                                 |  |                          
|No.     |  | Description                                                                                                                                                                                                     |  | Method of Filing         
|        |  |                                                                                                                                                                                                                 |  |                          
|4.4     |  | 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. (5)                               |  | Incorporated by Reference
|4.5     |  | Registration Rights Agreement dated as of January 10, 2002, by and among Wilsons The Leather
Experts Inc. and the Investors signatory thereto. (6)                                                              |  | Incorporated by Reference
|4.6     |  | Letter Amendment to the Common Stock Purchase Agreement and the Registration Rights Agreement
dated January 14, 2002, by and between Wilsons The Leather Experts Inc. and Bricoleur Capital
Management LLC. (7) |  | Incorporated by Reference
|4.7     |  | Registration Rights Agreement dated as of April 24, 2002, by and among Wilsons The Leather
Experts Inc. and the Investors signatory thereto. (8)                                                                |  | Incorporated by Reference
|10.1    |  | Wilsons The Leather Experts Inc. 2000 Long Term Incentive Plan, as
amended on August 24, 2000, March 21, 2002, and June 11, 2003.                                                                               |  | Electronic Transmission  
|10.2    |  | Wilsons The Leather Experts Inc. Employee Stock Purchase Plan as
amended June 11, 2003.                                                                                                                         |  | Electronic Transmission  
|99.1    |  | Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                 |  | Electronic Transmission  

B.       Report on Form 8-K: The
Company filed no Report on Form 8-K during the
first quarter ended May 3, 2003.

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##### Table of Contents






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/ Peter G. Michielutti
       
Peter G. Michielutti       Executive
Vice President and       Chief
Financial Officer |  | 
|                                 |  |                                                                                                                        |  | 
|Date:
June 12, 2003              |  |                                                                                                                       

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##### Table of Contents






CERTIFICATIONS

I, Joel N. Waller, certify that:

|   |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this quarterly report on Form 10-Q of Wilsons The Leather
Experts Inc.;                                                                                                                                                                                                                                                                                                 
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;                                                          
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                                                                             
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                                                                                
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                       |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                       |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing of this quarterly report (the Evaluation Date); and                                                                                                         
|  
|   |  | c)                                                                                                                                                                                                                                                                                                                                                                                       |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        
|  
|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):                                                                                                                                       
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                       |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and 
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                       |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                         
|  
|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|                    |  |                                                                                                        |  | 
|------------------- |  | ------------------------------------------------------------------------------------------------------ |  | 
|Date: June 12, 2003 |  |                                                                                                        |  | 
|                    |  | /s/ Joel N. Waller

Joel N. Waller, Chairman
and Chief Executive Officer
(principal executive officer) |  | 

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##### Table of Contents



I, Peter G. Michielutti, certify that:

|   |  |                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this quarterly report on Form 10-Q of Wilsons The Leather
Experts Inc.;                                                                                                                                                                                                                                                                                                 
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;                                                          
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                                                                             
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                                                                                
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                       |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                       |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing of this quarterly report (the Evaluation Date); and                                                                                                         
|  
|   |  | c)                                                                                                                                                                                                                                                                                                                                                                                       |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        
|  
|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent function):                                                                                                                                       
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                       |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and 
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                       |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                         
|  
|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|                    |  |                                                                                                                                                   |  | 
|------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Date: June 12, 2003 |  |                                                                                                                                                   |  | 
|                    |  | /s/ Peter G. Michielutti

Peter G. Michielutti, Executive Vice President
and Chief Financial Officer
(principal financial and accounting officer) |  | 

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INDEX TO EXHIBITS

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                          
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                          
|No.     |  | Description                                                                                                                                                                                                                                                                                                                                                                                                               |  | Method of Filing         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                          
|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, and the
Articles of Amendment dated May 23, 2002. (1)                                                                                                                                                                                          |  | Incorporated by Reference
|3.2     |  | Restated Bylaws of Wilsons The Leather Experts Inc. as amended June 16, 1998, January 25, 2000,
and May 23, 2002. (1)                                                                                                                                                                                                                                                                                                     |  | Incorporated by Reference
|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 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 111/4% Series A Senior Notes due 2004 and specimen Certificate of 111/4%
Series B Senior Notes due 2004. (3) |  | Incorporated by Reference
|4.3     |  | Registration Rights Agreement dated as of May 25, 1996, by and among CVS New York, Inc.
(formerly known as Melville Corporation), 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. (4)                                                                                               |  | Incorporated by Reference
|4.4     |  | 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. (5)                                                                                                                                                                                                                                         |  | Incorporated by Reference
|4.5     |  | Registration Rights Agreement dated as of January 10, 2002, by and among Wilsons The Leather
Experts Inc. and the Investors signatory thereto. (6)                                                                                                                                                                                                                                                                        |  | Incorporated by Reference
|4.6     |  | Letter Amendment to the Common Stock Purchase Agreement and the Registration Rights Agreement
dated January 14, 2002, by and between Wilsons The Leather Experts Inc. and Bricoleur Capital
Management LLC. (7)                                                                                                                                                                                                           |  | Incorporated by Reference

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|        |  |                                                                                                                                                                                 |  |                          
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------
|Exhibit |  |                                                                                                                                                                                 |  |                          
|No.     |  | Description                                                                                                                                                                     |  | Method of Filing         
|        |  |                                                                                                                                                                                 |  |                          
|4.7     |  | Registration Rights Agreement dated as of April 24, 2002, by and among Wilsons The Leather
Experts Inc. and the Investors signatory thereto. (8)                                |  | Incorporated by Reference
|10.1    |  | Wilsons The Leather Experts Inc. 2000 Long Term Incentive Plan, as
amended on August 24, 2000, March 21, 2002, and June 11, 2003.                                               |  | Electronic Transmission  
|10.2    |  | Wilsons The Leather Experts Inc. Employee Stock Purchase Plan as
amended June 11, 2003.                                                                                         |  | Electronic Transmission  
|99.1    |  | Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  | Electronic Transmission  



|(1) |  | Incorporated by reference to the same numbered exhibit to the Companys
Report on Form 10-Q for the quarter ended May 4, 2002 (File No. 0-21543).                                        
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(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 4.8 to the Companys Registration
Statement on Form S-1 (333-13967) filed with the Commission on October 11,
1996.                                  
|   
|(5) |  | 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 (File No. 0-21543).    
|   
|(6) |  | Incorporated by reference to Exhibit 4.2 to the Companys Report on Form
8-K filed with the Commission on January 23, 2002.                                                              
|   
|(7) |  | Incorporated by reference to Exhibit 4.3 to the Companys Report on Form
8-K filed with the Commission on January 23, 2002.                                                              
|   
|(8) |  | Incorporated by reference to Exhibit 4.2 to the Companys Report on Form
8-K filed with the Commission on May 3, 2002.                                                                   

29