##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (Mark one)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period ended May 3, 2008
 OR
 o
    
    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.
  MINNESOTA
    
    41-1839933(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 7401 BOONE AVE. N.
BROOKLYN PARK, MN 55428
 (763) 391-4000
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
  o þ




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##### 



WILSONS THE LEATHER EXPERTS INC.
 INDEX
 PagePART I  FINANCIAL INFORMATION
    
    
    3Item 1. Consolidated Financial Statements (Unaudited)
    
    
    3Consolidated Balance Sheets as of May 3, 2008 and February 2, 2008
    
    
    3Consolidated Statements of Operations for the three months ended May 3, 2008 and May 5, 2007
    
    
    4Consolidated Statements of Cash Flows for the three months ended May 3, 2008 and May 5, 2007
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4T. Controls and Procedures
    
    
    20PART II  OTHER INFORMATION
    
    
    20Item 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 6. Exhibits
    
    
    21Signature
    
    
    22Agency AgreementThird Amendment to Fifth Amended and Restated Credit AgreementFourth Amendment to Fifth Amended and Restated Credit AgreementSeparation AgreementRule 13a-14(a)/15d-14(a) Certification of Interim Chief Executive OfficerRule 13a-14(a)/15d-14(a) Certification of Chief Financial OfficerCertification of Interim Chief Executive OfficerCertification of Chief Financial Officer
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per share amounts)
 May 3,
    
    
    February 2,2008
    
    
    2008(1)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    9,313
    
    
    $
    7,362Accounts receivable, net
    
    
    2,750
    
    
    
    3,462Inventories
    
    
    33,777
    
    
    
    58,307Prepaid expenses
    
    
    3,007
    
    
    
    6,821Income taxes receivable
    
    
    208
    
    
    
    141Total current assets
    
    
    49,055
    
    
    
    76,093Property and equipment, net
    
    
    14,789
    
    
    
    13,681Other assets, net
    
    
    885
    
    
    
    815TOTAL ASSETS
    
    $
    64,729
    
    
    $
    90,589LIABILITIES,
PREFERRED STOCK AND COMMON SHAREHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    9,037
    
    
    $
    16,288Accrued expenses
    
    
    11,472
    
    
    
    12,718Deferred income taxes
    
    
    430
    
    
    
    723Current liabilities of discontinued operations
    
    
    8,918
    
    
    
    Total current liabilities
    
    
    29,857
    
    
    
    29,729Income taxes payable
    
    
    1,398
    
    
    
    1,367Other long-term liabilities
    
    
    11,962
    
    
    
    15,441Total liabilities
    
    
    43,217
    
    
    
    46,537Commitments and contingenciesPreferred stock, $.01 par value; 200,000 shares authorized; 46,667 shares issued
and outstanding on May 3, 2008 and February 2, 2008
    
    
    40,232
    
    
    
    39,033Shareholders
equity (deficit):Common stock, $.01 par value; 150,000,000 shares authorized;
39,372,209 and 39,336,903 shares issued and outstanding on May
3, 2008 and February 2, 2008, respectively
    
    
    394
    
    
    
    393Additional paid-in capital
    
    
    139,124
    
    
    
    140,500Accumulated deficit
    
    
    (158,240
    )
    
    
    (135,876
    )Accumulated other comprehensive income
    
    
    2
    
    
    
    2Total
shareholders equity (deficit)
    
    
    (18,720
    )
    
    
    5,019TOTAL
LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
    
    $
    64,729
    
    
    $
    90,589
 
 (1)
    
    Derived from audited consolidated financial statements.  3




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WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
 Three months endedMay 3,
    
    
    May 5,2008
    
    
    2007Net sales
    
    $
    36,435
    
    
    $
    42,364Cost of goods sold, buying and occupancy costs
    
    
    31,464
    
    
    
    36,205Gross margin
    
    
    4,971
    
    
    
    6,159Selling, general and administrative expenses
    
    
    17,155
    
    
    
    19,060Depreciation and amortization
    
    
    1,026
    
    
    
    2,066Operating loss
    
    
    (13,210
    )
    
    
    (14,967
    )Interest expense, net
    
    
    171
    
    
    
    431Loss from continuing operations before income tax provision
(benefit)
    
    
    (13,381
    )
    
    
    (15,398
    )Income tax provision (benefit)
    
    
    23
    
    
    
    (73
    )Loss from continuing operations
    
    
    (13,404
    )
    
    
    (15,325
    )Loss from discontinued operations, net of income tax benefit of $269 and $0,
respectively
    
    
    (8,960
    )
    
    
    (5,940
    )Net loss
    
    
    (22,364
    )
    
    
    (21,265
    )Preferred stock paid-in-kind dividends
    
    
    1,373
    
    
    
    Net loss attributable to common shareholders
    
    $
    (23,737
    )
    
    $
    (21,265
    )Loss per common share  basic and dilutedLoss from continuing operations
    
    $
    (0.38
    )
    
    $
    (0.39
    )Loss from discontinued operations
    
    
    (0.22
    )
    
    
    (0.15
    )Net loss
    
    $
    (0.60
    )
    
    $
    (0.54
    )Weighted
average common shares outstanding  basic and diluted
    
    
    39,350
    
    
    
    39,212
  4




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WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
 Three months endedMay 3,
    
    
    May 5,2008
    
    
    2007OPERATING ACTIVITIES:Net loss
    
    $
    (22,364
    )
    
    $
    (21,265
    )Loss from
discontinued operations, net of income tax benefit
    
    
    (8,960
    )
    
    
    (5,940
    )Loss from continuing operations
    
    
    (13,404
    )
    
    
    (15,325
    )Adjustments to reconcile loss from continuing operations to net cash
used in operating activities of continuing operations:Depreciation and amortization
    
    
    1,026
    
    
    
    2,066Amortization of deferred financing costs
    
    
    102
    
    
    
    88Stock-based compensation expense (benefit)
    
    
    (184
    )
    
    
    328Deferred income taxes
    
    
    (23
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable, net
    
    
    711
    
    
    
    788Inventories
    
    
    2,744
    
    
    
    12,434Prepaid expenses
    
    
    3,669
    
    
    
    508Accounts payable and accrued expenses
    
    
    (9,025
    )
    
    
    (5,098
    )Income taxes payable and other liabilities
    
    
    (502
    )
    
    
    116Net cash used in operating activities from continuing operations
    
    
    (14,886
    )
    
    
    (4,095
    )Net cash provided by (used in) operating activities from
discontinued operations
    
    
    18,655
    
    
    
    (5,167
    )Net cash provided by (used in) operating activities
    
    
    3,769
    
    
    
    (9,262
    )INVESTING ACTIVITIES:Additions to property and equipment
    
    
    (1,652
    )
    
    
    (1,187
    )Net cash used in investing activities
    
    
    (1,652
    )
    
    
    (1,187
    )FINANCING ACTIVITIES:Proceeds from issuance of common stock, net
    
    
    7
    
    
    
    27Debt issuance costs
    
    
    (173
    )
    
    
    (18
    )Net cash provided by (used in) financing activities
    
    
    (166
    )
    
    
    9NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    1,951
    
    
    
    (10,440
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    7,362
    
    
    
    19,909CASH AND CASH EQUIVALENTS, end of period
    
    $
    9,313
    
    
    $
    9,469CASH PAID DURING THE PERIOD:Interest
    
    $
    142
    
    
    $
    602Income taxes
    
    
    82
    
    
    
    (13
    )SUPPLEMENTAL DISCLOSURES:Investing Activities  non-cash additions to property and
equipment
    
    $
    529
    
    
    $
    1,012Financing Activities  preferred stock paid-in-kind dividends
    
    
    1,373
    
    
    
    
  5




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WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 1.
    
    Basis of Presentation
   Use of estimates
  Fiscal year
  2.
    
    Summary of Significant Risks and Uncertainties and Going Concern Assessment
   6




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3.
    
    Recent Accounting Pronouncements
   4.
    
    Reorganization and Partial Store Liquidation and Discontinued Operations
    7




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Three Months EndedMay 3,
    
    
    May 5,(In thousands)
    
    2008
    
    
    2007Net sales
    
    $
    30,161
    
    
    $
    15,231Cost of goods sold and occupancy costs
    
    
    28,966
    
    
    
    14,939Gross margin
    
    
    1,195
    
    
    
    292Selling, general and administrative expenses
    
    
    10,377
    
    
    
    5,459Depreciation and amortization
    
    
    47
    
    
    
    773Loss before income tax benefit
    
    
    (9,229
    )
    
    
    (5,940
    )Income tax benefit
    
    
    (269
    )
    
    
    Loss from discontinued operations, net of tax
    
    $
    (8,960
    )
    
    $
    (5,940
    )
  May 3,(In thousands)
    
    2008Compensation and benefits
    
    $
    144Taxes other than income taxes
    
    
    292Rent
    
    
    2,346Estimated fair value of remaining lease obligations
    
    
    5,274Due to Hilco/Gordon Brothers Joint Venture
    
    
    701Other
    
    
    161Current liabilities of discontinued
operations
    
    $
    8,918
  Period from February 15, 2008through May 3, 2008(In thousands)
    
    Cash
    
    
    Non-cash
    
    
    TotalNet proceeds from inventory liquidation (1)
    
    $
    (7,688
    )
    
    $
    4,613
    
    
    $
    (3,075
    )Store asset recovery (2)
    
    
    (219
    )
    
    
    
    
    
    
    (219
    )Estimated fair value of remaining lease obligations (3)
    
    
    5,319
    
    
    
    
    
    
    
    5,319Deferred rent credits (4)
    
    
    
    
    
    
    (2,918
    )
    
    
    (2,918
    )Store closing, occupancy and selling expenses (5)
    
    
    9,344
    
    
    
    79
    
    
    
    9,423Other administrative costs (6)
    
    
    
    
    
    
    
    
    
    
    Net cost of
liquidation before
income tax benefit
    
    $
    6,756
    
    
    $
    1,774
    
    
    $
    8,530
 
 (1)
    
    Represents the amount by which the gross proceeds from the inventory liquidation (total of
the guaranteed amount, as adjusted, and reimbursed store operating expenses) exceeded the
carrying value of the liquidated inventory.(2)
    
    An asset impairment charge for the unrecoverable net book value of leasehold improvements,
display fixtures and other store related assets of $9.3 million was recorded in the fourth
quarter of fiscal 2007.(3)
    
    Includes the estimated fair value of the remaining lease obligations of 130 liquidation
stores that are still in lease buyout negotiations with the landlords, accrued in accordance
with SFAS 146.(4)
    
    Represents the write-off of the remaining unrecognized deferred rent credits related to the
straight-line recognition of scheduled rent increases over the lease term.(5)
    
    Represents store selling, occupancy and other operating expenses, including expenses
reimbursed by the Hilco/Gordon Brothers Joint Venture.(6)
    
    Excluded from store liquidation expenses are administrative costs, primarily employee
separation costs, of $0.8 million incurred in connection with the organizational realignment.
These costs are included in selling, general and administrative expenses of continuing
operations. 8




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5.
    
    Cash and Cash Equivalents
  6.
    
    Debt
   7.
    
    Other Long-Term Liabilities
  8.
    
    Preferred Stock and Warrant Financing
    9.
    
    Stock-Based Compensation
    9




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10.
    
    Income taxes
     11.
    
    Loss Per Common Share
   Three Months EndedMay 3,
    
    
    May 5,(In thousands, except per share amounts)
    
    2008
    
    
    2007Loss from continuing operations:Loss from continuing operations
    
    $
    (13,404
    )
    
    $
    (15,325
    )Preferred stock paid-in-kind dividends
    
    
    1,373
    
    
    
    Loss from continuing operations attributable to common
shareholders
    
    $
    (14,777
    )
    
    $
    (15,325
    )Loss from discontinued operations, net of income tax benefit
    
    $
    (8,960
    )
    
    $
    (5,940
    )Net loss attributable to common shareholders:Loss from continuing operations
    
    $
    (13,404
    )
    
    $
    (15,325
    )Loss from discontinued operations, net of income tax benefit
    
    
    (8,960
    )
    
    
    (5,940
    )Net loss
    
    
    (22,364
    )
    
    
    (21,265
    )Preferred stock paid-in-kind dividends
    
    
    1,373
    
    
    
    Net loss attributable to common shareholders
    
    $
    (23,737
    )
    
    $
    (21,265
    )Weighted average common shares outstanding  basic and diluted
    
    
    39,350
    
    
    
    39,212Loss per common share  basic and diluted:Loss from continuing operations
    
    $
    (0.38
    )
    
    $
    (0.39
    )Loss from discontinued operations
    
    
    (0.22
    )
    
    
    (0.15
    )Net loss
    
    $
    (0.60
    )
    
    $
    (0.54
    )
 10




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Three Months EndedMay 3,
    
    
    May 5,2008
    
    
    2007Stock options
    
    
    2,311,018
    
    
    
    2,495,524Warrants
    
    
    20,022,364
    
    
    
    4,000,000Preferred
Stock (1)
    
    
    31,111,333
    
    
    
    Total potentially dilutive shares
    
    
    53,444,715
    
    
    
    6,495,524
 
 (1)
    
    Shares of Preferred Stock using an as if converted method. 12.
    
    Commitments and contingencies
   13. Supplemental Balance Sheet Information
 May 3,
    
    
    February 2,(In thousands)
    
    2008
    
    
    2008Accounts receivable, net:Trade receivables
    
    $
    2,274
    
    
    $
    3,238Other receivables
    
    
    546
    
    
    
    388Total
    
    
    2,820
    
    
    
    3,626Allowance for doubtful accounts
    
    
    (35
    )
    
    
    (48
    )Deferred sales
    
    
    (35
    )
    
    
    (116
    )Total accounts receivable, net
    
    $
    2,750
    
    
    $
    3,462Inventories:Raw materials
    
    $
    1,389
    
    
    $
    1,348Finished goods
    
    
    32,388
    
    
    
    56,959Total inventories
    
    $
    33,777
    
    
    $
    58,307Property and equipment, net:Equipment and furniture
    
    $
    53,884
    
    
    $
    66,324Leasehold improvements
    
    
    22,927
    
    
    
    31,373Total
    
    
    76,811
    
    
    
    97,697Accumulated depreciation and amortization
    
    
    (62,022
    )
    
    
    (84,016
    )Net property and equipment
    
    $
    14,789
    
    
    $
    13,681Other assets, net:Debt issuance costs
    
    $
    4,751
    
    
    $
    4,578Accumulated amortization
    
    
    (3,866
    )
    
    
    (3,763
    )Total
    
    $
    885
    
    
    $
    815Accrued expenses:Compensation and benefits
    
    $
    3,486
    
    
    $
    4,708Taxes other than income taxes
    
    
    1,782
    
    
    
    1,893Rent
    
    
    3,550
    
    
    
    2,722Other
    
    
    2,654
    
    
    
    3,395Total
    
    $
    11,472
    
    
    $
    12,718
 
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   11




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Overview
        Reorganization
and Partial Store Liquidation.
  New
Mall Accessories Store Concept.
    12




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Critical Accounting Policies
  Results of Operations
   Three months endedMay 3,
    
    May 5,2008
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold, buying and occupancy costs
    
    
    86.4
    
    
    
    85.5Gross margin
    
    
    13.6
    
    
    
    14.5Selling, general and administrative expenses
    
    
    47.1
    
    
    
    45.0Depreciation and amortization
    
    
    2.8
    
    
    
    4.9Operating loss
    
    
    (36.3
    )
    
    
    (35.3
    )
  Three months endedMay 3,
    
    
    May 5,2008
    
    
    2007Net sales (in thousands)
    
    $
    36,435
    
    
    $
    42,364Comparable store sales (1)Total
    
    
    (8.8)
    %
    
    
    (20.8)
    %By divisionMens
    
    
    (21.7
    )
    
    
    (28.2
    )Womens
    
    
    (27.1
    )
    
    
    (25.2
    )Accessories
    
    
    7.8
    
    
    
    (12.1
    )By channelMall stores
    
    
    (27.1
    )
    
    
    (25.1
    )Outlet stores
    
    
    (1.4
    )
    
    
    (15.4
    )Airport stores
    
    
    8.3
    
    
    
    (16.2
    )Number of stores:Beginning of period
    
    
    228
    
    
    
    254Opened
    
    
    
    
    
    
    Closed
    
    
    
    
    
    
    (3
    )End of period
    
    
    228
    
    
    
    251Discontinued operations
    
    
    163
    
    
    
    163
 
 (1)
    
    Comparable store sales for 2007 include discontinued operations. Net Sales.
 Cost of Goods Sold, Buying and Occupancy Costs.
 13




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Selling, General and Administrative Expenses.
   Depreciation and Amortization.
 Operating Loss.
 Interest Expense, Net.
 14




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Income Tax Provision (Benefit).
  Loss from Continuing Operations.
 Discontinued Operations.
 Net Loss Attributable to Common Shareholders.
 Liquidity and Capital Resources
 Liquidity.
  15




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Capital resources.
   
    
    100% of the book value of credit card receivables;
    
    plus the lesser of $10 million or 100% of the book value of eligible wholesale accounts
receivable;
    
    plus 102.5% of the then applicable discount rate applied in appraising eligible retail
inventories times the appraised eligible retail inventories, plus 102.5% of such discount
rate times our future retail inventories subject to trade letters of credit;
    
    plus the lesser of $10 million, or 60% of the book value of our wholesale inventory,
including in-transit inventory but minus the book value of in-transit inventory in excess of
$5 million;
    
    plus 60% of the book value of our future wholesale inventories related to trade letters
of credit;
    
    minus a reserve equal to 10% of the lesser of $115.0 million and the maximum amount
calculated under the formula described above, plus $10.0 million, plus other reserves as set
forth by GECC;
    
    plus the amount of cash deposited in certain banks under the control of GECC;
    
    minus the aggregate of letter of credit obligations and certain other advances;
  16




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Cash Flow Analysis
 Cash and Cash Equivalents.
 Operating Activities.
 17




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Investing Activities.
  Financing Activities.
  Contractual obligations
  18




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Off-balance sheet arrangements
  Seasonality and inflation
   Recently issued accounting pronouncements
  Forward-looking statements
  19




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ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4T.
    
    CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  We may not be able to maintain our listing on The Nasdaq Global Market if we are unable to
demonstrate our ability to achieve and sustain compliance over an extended period and, if we fail
to do so, the price and liquidity of our common stock may decline.
  20




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Our comparable store sales declined during each of the last three fiscal years.
  
    
    general economic conditions and, in particular, the retail sales environment;
    
    consumer shopping preferences;
    
    transition of our target customer base;
    
    level of acceptance of our designer brand merchandise offerings;
    
    acceptance of the Wilsons Leatherbrand;
    
    actions by competitors or mall anchor tenants;
    
    weather conditions;
    
    fashion trends;
    
    changes in our merchandise mix;
    
    the timing of new store openings and the relative proportion of new stores to mature
stores;
    
    maintaining appropriate inventory levels;
    
    calendar shifts of seasonal periods; and
    
    timing of promotional events.
  We
may need to record additional impairment charges in the future.
  
 ITEM 6.
    
    EXHIBITS
  21




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SIGNATURE
   By:
    
    /s/ STACY A. KRUSE
Stacy A. Kruse
Chief Financial Officer and Treasurer
  22




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INDEX TO EXHIBITS
 ExhibitNo
    
    Description
    
    Method of Filing3.1
    
    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 Reference3.2
    
    Restated Bylaws of Wilsons The Leather Experts Inc. as amended June 16,
1998, January 25, 2000, May 23, 2002, and February 5, 2004. (2)
    
    Incorporated by Reference4.1
    
    Specimen of common stock certificate. (3)
    
    Incorporated by Reference4.2
    
    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 Reference4.3
    
    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 Reference4.4
    
    Common Stock and Warrant Purchase Agreement, dated as of April 25, 2004,
by and among Wilsons The Leather Experts Inc. and the Purchasers
identified on the signatory pages thereto (the Purchase Agreement). (6)
    
    Incorporated by Reference4.5
    
    Registration Rights Agreement, dated as of April 25, 2004, by and among
Wilsons The Leather Experts Inc. and the Investors identified therein.
(7)
    
    Incorporated by Reference4.6
    
    Form of Warrant issued to the Purchasers named in the Purchase Agreement
on April 25, 2004. (8)
    
    Incorporated by Reference10.1
    
    Agency Agreement dated as of February 14, 2008 between a joint venture
composed of Hilco Merchant Resources, LLC, Gordon Brothers Retail
Partners, LLC and HRE Holdings, LLC and Rosedale Wilsons, Inc., Wilsons
Leather Holdings Inc. and the other parties thereto.
    
    Electronic Transmission10.2
    
    Third Amendment to Fifth Amended and Restated Credit Agreement
dated as of February 14, 2008, among Wilsons Leather Holdings Inc.,
General Electric Capital Corporation, as Lender, Term Lender, Swing Line
Lender and Agent, the Credit Parties signatory thereto and the Lenders
signatory thereto.
    
    Electronic Transmission10.3
    
    Fourth Amendment to Fifth Amended and Restated Credit Agreement
dated as of February 25, 2008, among Wilsons Leather Holdings Inc.,
General Electric Capital Corporation, as Lender, Term Lender, Swing Line
Lender and Agent, the Credit Parties signatory thereto and the Lenders
signatory thereto.
    
    Electronic Transmission10.4
    
    Separation Agreement dated March 28, 2008 by and between Michael Searles
and Wilsons The Leather Experts Inc.
    
    Electronic Transmission31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Interim Chief Executive Officer.
    
    Electronic Transmission31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
    
    Electronic Transmission32.1
    
    Certification of Interim Chief Executive Officer pursuant to Section
1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
    
    Electronic Transmission
 23




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##### Table of Contents



ExhibitNo
    
    Description
    
    Method of Filing32.2
    
    Certification of Chief Financial Officer pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, 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. 000-21543).2.
    
    Incorporated by reference to the same numbered exhibit to the Companys Report on Form 10-K
for the year ended January 31, 2004 (File No. 000-21543).3.
    
    Incorporated by reference to the same numbered exhibit to Amendment No. 1 to the Companys
Registration Statement on Form S-l (333-13967) filed with the Commission on December 24, 1996.4.
    
    Incorporated by reference to Exhibit 4.8 to the Companys Registration Statement on Form S-l
(333-13967) filed with the Commission on October 11, 1996.5.
    
    Incorporated by reference to Exhibit 4.5 to the Companys Report on Form 10-K for the fiscal
year ended January 29, 2000, filed with the Commission (File No. 000-21543).6.
    
    Incorporated by reference to Exhibit 4.1 to the Companys Report on Form 8-K filed with the
Commission on April 27, 2004.7.
    
    Incorporated by reference to Exhibit 4.2 to the Companys Report on Form 8-K filed with the
Commission on April 27, 2004.8.
    
    Incorporated by reference to Exhibit 4.3 to the Companys Report on Form 8-K filed with the
Commission on April 27, 2004.
    
    Certain portions of this exhibit have been omitted pursuant to a request for confidential
treatment and have been filed separately with the Securities and Exchange Commission. 24