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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 November 1, 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
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)7401 BOONE AVE. NBROOKLYN 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 December 1, 2003, there were 20,786,625 shares of the Registrants
common stock, $0.01 par value per share, outstanding.





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|                                               |                                                                                               |                                            |  |  |  |  |  | 
|---------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I- FINANCIAL INFORMATION                 
|                                               | ITEM 1. CONSOLIDATED FINANCIAL INFORMATION                                                   
|                                               |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                                               |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                               |                                                                                               | 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. QUANTITIATIVE AND QUALITATIVE DISCLOSURES 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                                     
|INDEX TO EXHIBITS                             
|EX-31.1 Rule 13a-14(a)/15d-14(a) Certification
|EX-31.2 Rule 13a-14(a)/15d-14(a) Certification
|EX-32.1 Section 906 Certifications            



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WILSONS THE LEATHER EXPERTS INC.
INDEX

PagePART I  FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements (Unaudited)Consolidated Balance Sheets as of November 1, 2003 and
February 1, 2003
  
3Consolidated Statements of Operations for the
three months ended November 1, 2003 and November 2,
2002
  
 4Consolidated Statements of Operations for the year to
date period ended November 1, 2003 and November 2,
2002
  
 5Consolidated Statements of Cash Flows for the year to
date period ended November 1, 2003 and November 2,
2002
  
 6Notes to Consolidated Financial Statements
  
 7Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
  
 13Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 22Item 4. Controls and Procedures
  
 22PART II  OTHER INFORMATIONItem 2. Changes in Securities and Use of Proceeds
  
 23Item 6. Exhibits and Report on Form 8-K
  
 23Signature
  
 26


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PART I-FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL
INFORMATION

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

November 1,
    
    February 1,2003
    
    2003(1)(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    30,442Accounts receivable, net
    
    
    6,296
    
    
    
    5,162Inventories
    
    
    174,520
    
    
    
    118,701Prepaid expenses
    
    
    9,128
    
    
    
    3,812Assets of discontinued operations
    
    
    40
    
    
    
    3,379Deferred income taxes
    
    
    
    
    
    
    3,777Refundable income taxes
    
    
    
    
    
    
    3,064TOTAL CURRENT ASSETS
    
    
    189,984
    
    
    
    168,337Property and equipment, net
    
    
    67,578
    
    
    
    73,974Goodwill and other assets, net
    
    
    3,000
    
    
    
    3,315Deferred income taxes
    
    
    19,865
    
    
    
    865TOTAL ASSETS
    
    $
    280,427
    
    
    $
    246,491LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    47,354
    
    
    $
    19,492Notes payable
    
    
    61,633
    
    
    
    Current portion of long-term debt
    
    
    30,635
    
    
    
    Accrued expenses
    
    
    24,343
    
    
    
    25,219Liabilities of discontinued operations
    
    
    814
    
    
    
    15,075Income taxes payable
    
    
    1,529
    
    
    
    Deferred income taxes
    
    
    2,245
    
    
    
    TOTAL CURRENT LIABILITIES
    
    
    168,553
    
    
    
    59,786Long-term debt
    
    
    25,075
    
    
    
    55,695Other long-term liabilities
    
    
    14,073
    
    
    
    13,782TOTAL LIABILITIES
    
    
    207,701
    
    
    
    129,263COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITY:Common stock, $.01 par value; 150,000,000 shares authorized; 20,768,490 and 20,473,033
shares issued and outstanding on November 1, 2003, and February 1, 2003, respectively
    
    
    208
    
    
    
    205Additional paid-in capital
    
    
    100,477
    
    
    
    99,010Retained earnings (accumulated deficit)
    
    
    (27,160
    )
    
    
    18,707Unearned compensation
    
    
    (801
    )
    
    
    (691
    )Accumulated other comprehensive income (loss)
    
    
    2
    
    
    
    (3
    )TOTAL SHAREHOLDERS EQUITY
    
    
    72,726
    
    
    
    117,228TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    280,427
    
    
    $
    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 endedNovember 1,
    
    November 2,2003
    
    2002NET SALES
    
    $
    97,880
    
    
    $
    110,187COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS
    
    
    75,003
    
    
    
    83,848Gross margin
    
    
    22,877
    
    
    
    26,339SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    35,124
    
    
    
    40,504DEPRECIATION AND AMORTIZATION
    
    
    4,226
    
    
    
    3,939Operating loss
    
    
    (16,473
    )
    
    
    (18,104
    )INTEREST EXPENSE, net
    
    
    2,889
    
    
    
    3,208Loss from continuing operations before income taxes
    
    
    (19,362
    )
    
    
    (21,312
    )INCOME TAX BENEFIT
    
    
    (7,744
    )
    
    
    (8,513
    )Loss from continuing operations
    
    
    (11,618
    )
    
    
    (12,799
    )LOSS FROM DISCONTINUED OPERATIONS, net of tax
    
    
    
    
    
    
    (4,212
    )Net loss
    
    $
    (11,618
    )
    
    $
    (17,011
    )BASIC AND DILUTED LOSS PER SHARE:Loss from continuing operations
    
    $
    (0.57
    )
    
    $
    (0.63
    )Loss from discontinued operations
    
    
    
    
    
    
    (0.21
    )Basic and diluted loss per share
    
    $
    (0.57
    )
    
    $
    (0.84
    )Weighted average shares outstanding  basic and diluted
    
    
    20,551
    
    
    
    20,329


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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

Year to date period endedNovember 1,
    
    November 2,2003
    
    2002NET SALES
    
    $
    252,931
    
    
    $
    268,439COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS
    
    
    208,990
    
    
    
    216,400Gross margin
    
    
    43,941
    
    
    
    52,039SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    100,369
    
    
    
    106,777DEPRECIATION AND AMORTIZATION
    
    
    12,532
    
    
    
    11,497Operating loss
    
    
    (68,960
    )
    
    
    (66,235
    )INTEREST EXPENSE, net
    
    
    7,631
    
    
    
    7,289Loss from continuing operations before income taxes and
cumulative effect of a change in accounting principle
    
    
    (76,591
    )
    
    
    (73,524
    )INCOME TAX BENEFIT
    
    
    (30,636
    )
    
    
    (29,411
    )Loss from continuing operations before cumulative effect of a
change in accounting principle
    
    
    (45,955
    )
    
    
    (44,113
    )LOSS FROM DISCONTINUED OPERATIONS, net of tax
    
    
    
    
    
    
    (14,612
    )CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE, net of tax
    
    
    
    
    
    
    (24,567
    )Net loss
    
    $
    (45,955
    )
    
    $
    (83,292
    )BASIC AND DILUTED LOSS PER SHARE:Loss from continuing operations before cumulative effect of a change in accounting principle
    
    $
    (2.24
    )
    
    $
    (2.21
    )Loss from discontinued operations
    
    
    
    
    
    
    (0.73
    )Cumulative effect of a change in accounting principle
    
    
    
    
    
    
    (1.23
    )Basic and diluted loss per share
    
    $
    (2.24
    )
    
    $
    (4.17
    )Weighted average shares outstanding  basic and diluted
    
    
    20,488
    
    
    
    19,956


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)

Year to date period endedNovember 1,
    
    November 2,2003
    
    2002OPERATING ACTIVITIES:Net loss
    
    $
    (45,955
    )
    
    $
    (83,292
    )Loss from discontinued operations, net of tax
    
    
    
    
    
    
    14,612Cumulative
effect of a change in accounting principle, net of tax
    
    
    
    
    
    
    24,567Loss from continuing operations
    
    
    (45,955
    )
    
    
    (44,113
    )Adjustments to reconcile loss from continuing
operations to net cash used in operating activities:Depreciation
    
    
    12,469
    
    
    
    11,468Amortization
    
    
    63
    
    
    
    29Amortization of deferred financing costs
    
    
    1,277
    
    
    
    767Loss on disposal of assets
    
    
    95
    
    
    
    269Restricted stock compensation expense
    
    
    250
    
    
    
    258Deferred income taxes
    
    
    (12,978
    )
    
    
    (8,078
    )Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (1,134
    )
    
    
    1,904Inventories
    
    
    (55,819
    )
    
    
    (112,497
    )Prepaid expenses
    
    
    (5,316
    )
    
    
    (9,535
    )Refundable income taxes
    
    
    3,064
    
    
    
    (22,700
    )Accounts payable and accrued expenses
    
    
    27,031
    
    
    
    28,239Income taxes payable and other liabilities
    
    
    2,072
    
    
    
    (9,253
    )Net cash used in operating activities of continuing operations
    
    
    (74,881
    )
    
    
    (163,242
    )INVESTING ACTIVITIES:Additions to property and equipment
    
    
    (6,348
    )
    
    
    (6,791
    )Net proceeds from sale/leaseback
    
    
    
    
    
    
    12,546Changes in other assets
    
    
    
    
    
    
    (79
    )Net cash provided by (used in) investing activities of continuing operations
    
    
    (6,348
    )
    
    
    5,676FINANCING ACTIVITIES:Proceeds from issuance of common stock, net
    
    
    946
    
    
    
    12,781Change in notes payable
    
    
    56,770
    
    
    
    123,787Checks written in excess of cash balance
    
    
    4,863
    
    
    
    10,216Debt acquisition costs
    
    
    (1,025
    )
    
    
    (1,458
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    150Repayments of long-term debt
    
    
    (30
    )
    
    
    (4,800
    )Other financing
    
    
    5
    
    
    
    8Net cash provided by financing activities of continuing operations
    
    
    61,529
    
    
    
    140,684NET CASH USED IN DISCONTINUED OPERATIONS
    
    
    (10,742
    )
    
    
    (22,071
    )NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (30,442
    )
    
    
    (38,953
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    30,442
    
    
    
    38,953CASH AND CASH EQUIVALENTS, end of period
    
    $
    
    
    
    $
    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, is the leading specialty retailer of quality leather
outerwear, accessories and apparel in the United States. As of November 1,
2003, Wilsons Leather operated 607 permanent retail stores located in 45 states
and the District of Columbia, including 473 mall stores, 114 outlet stores and
20 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 in 2003.

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
November 1, 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 the Companys consolidated financial
statements in its 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 were 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 (SEC) applicable to interim financial information.
Certain information and footnote disclosures, 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 in these interim statements pursuant to such rules and regulations.
Although management believes that the accompanying disclosures are adequate so
as not to make the information presented 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.

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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, Statement of Financial
Accounting Standards (SFAS) No. 141, Business Combinations(SFAS No. 141),
and SFAS No. 142, Goodwill and Other Intangible Assets(SFAS No. 142),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. As of November 1, 2003, and
February 1, 2003, the amount of goodwill was de minimis.

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. The Company defined its
reporting units 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 year to date period ended August 3, 2002.

FISCAL YEAR

Wilsons Leathers fiscal year ends on the Saturday closest to January 31.
The periods that will end or have ended January 31, 2004, February 1, 2003, February 2, 2002,
February 3, 2001, January 29, 2000, and January 30, 1999, are referred to
herein as 2003, 2002, 2001, 2000, 1999, and 1998, 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 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, inventories, tax
assets related to net operating losses, 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 November 1, 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 the inventory value is properly

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stated at the lower of cost or market value. Factors related to current
inventories such as future consumer demand, 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 SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets(SFAS No. 144), 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 expenses.

When a store under a long-term lease is to be closed, the Company records
a liability for any lease termination or broker fees at the time an agreement
related to such closing is signed. At November 1, 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 or
gift card 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 destination.

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.

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LOSS PER SHARE

Basic loss per share is computed by dividing the net loss by the weighted
average number of common shares outstanding during the year. Diluted loss per
share is computed by dividing the 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 (calculated using the treasury stock method).
The following table reconciles the number of shares utilized in the loss per
share calculations (in thousands):

For the three months ended
    
    For the year to date period endedNovember 1, 2003
    
    November 2, 2002
    
    November 1, 2003
    
    November 2, 2002Weighted average common shares outstanding  basic
    
    
    20,551
    
    
    
    20,329
    
    
    
    20,488
    
    
    
    19,956Effect of dilutive securities: stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares outstanding  diluted
    
    
    20,551
    
    
    
    20,329
    
    
    
    20,488
    
    
    
    19,956


STOCK-BASED COMPENSATION

As permitted by SFAS No. 123, Accounting for Stock-Based Compensation
(SFAS No. 123),the Company uses 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. The Company 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, the Companys net
loss and basic and diluted loss per share would have been the following pro
forma amounts (in thousands, except per share amounts):

For the three months ended
    
    For the year to date period endedNovember 1, 2003
    
    November 2, 2002
    
    November 1, 2003
    
    November 2, 2002Net Loss:As reported
    
    $
    (11,618
    )
    
    $
    (17,011
    )
    
    $
    (45,955
    )
    
    $
    (83,292
    )Stock option and purchase plans
    
    
    (355
    )
    
    
    (443
    )
    
    
    (1,201
    )
    
    
    (1,266
    )Pro forma loss
    
    $
    (11,973
    )
    
    $
    (17,454
    )
    
    $
    (47,156
    )
    
    $
    (84,558
    )Basic and diluted loss per share:As reported
    
    $
    (0.57
    )
    
    $
    (0.84
    )
    
    $
    (2.24
    )
    
    
    (4.17
    )Stock option and purchase plans
    
    
    (0.01
    )
    
    
    (0.02
    )
    
    
    (0.06
    )
    
    
    (0.07
    )Pro forma basic and diluted loss per share
    
    $
    (0.58
    )
    
    $
    (0.86
    )
    
    $
    (2.30
    )
    
    
    (4.24
    )Weighted average fair value of options granted
    
    
    N/A
    
    
    $
    4.03
    
    
    $
    2.04
    
    
    $
    6.52


The pro forma 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
    
    Expectedrisk free rate
    
    yield
    
    lives
    
    volatility2003
    
    
    3.0
    %
    
    
    0.0
    %
    
    
    5.0
    
    
    
    55.8
    %2002
    
    
    2.0
    %
    
    
    0.0
    %
    
    
    6.5
    
    
    
    52.6
    %


NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation (FIN) No. 46, Consolidation of Variable Interest Entities
(FIN No. 46). FIN No. 46 states that companies that have exposure to
economic risks and potential rewards from another entitys assets and
activities have a controlling financial interest in a variable interest entity
and should consolidate the entity, despite the absence of clear control through
a voting equity interest. The consolidation requirements apply to all variable
interest entities created after January 31, 2003. For variable interest
entities that existed prior to February 1, 2003, FASB Staff Position No. 46-6
delayed the consolidation requirements until annual or interim periods ending
after December 15, 2003. Disclosure of significant variable interest entities
is required in all financial statements issued after January 31, 2003,
regardless of when the variable interest was created. FIN No. 46 did not have
an impact on the Companys consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity
(SFAS No. 150). SFAS No. 150 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 an asset in some
circumstances). Many of those instruments were previously classified as
equity. The Company does not have any financial instruments

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outstanding to which the provisions of SFAS No. 150 apply and therefore
SFAS No. 150 did not have an impact on the Companys consolidated financial
statements.

In December 2002, the Emerging Issues Task Force (EITF) issued EITF
00-21, Revenue Arrangements with Multiple Deliverables(EITF 00-21).EITF
00-21 addresses certain aspects of the accounting for arrangements under which
a company will perform multiple revenue generating activities. In some
arrangements, the different revenue generating activities (deliverables) are
sufficiently separable, and there exists sufficient evidence of their fair
values to separately account for some or all of the deliverables (that is,
there are separate units of accounting). In other arrangements, some or all of
the deliverables are not independently functional, or there is not sufficient
evidence of their fair values to account for them separately. EITF 00-21
addresses the circumstances under which an arrangement involving multiple
deliverables should be divided into separate units of accounting. EITF 00-21
does not change otherwise applicable revenue recognition criteria. The
provisions of EITF 00-21 were effective beginning in the third quarter of 2003.
The adoption of EITF 00-21 did not have an impact on revenue recognition.

3. DISCONTINUED OPERATIONS

In November 2002, the Company liquidated 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):

For the three months ended
    
    For the year to date period endedNovember 1, 2003
    
    November 2, 2002
    
    November 1, 2003
    
    November 2, 2002Net sales
    
    $
    
    
    
    $
    22,428
    
    
    $
    
    
    
    $
    72,819Loss before income taxes
    
    
    
    
    
    
    (7,040
    )
    
    
    
    
    
    
    (24,352
    )Loss from discontinued operations
    
    $
    
    
    
    $
    (4,212
    )
    
    $
    
    
    
    $
    (14,612
    )Loss before income taxes, per share
    
    $
    
    
    
    $
    (0.35
    )
    
    $
    
    
    
    $
    (1.22
    )Loss from discontinued operations, per share
    
    $
    
    
    
    $
    (0.21
    )
    
    $
    
    
    
    $
    (0.73
    )


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

November 1, 2003
    
    February 1, 2003Cash and cash equivalents
    
    $
    
    
    
    $
    882Accounts receivable, net
    
    
    40
    
    
    
    104Other current assets
    
    
    
    
    
    
    2,393Current assets of discontinued operations
    
    $
    40
    
    
    $
    3,379Total assets of discontinued operations
    
    $
    40
    
    
    $
    3,379Accounts payable
    
    $
    
    
    
    $
    590Accrued expenses
    
    
    814
    
    
    
    14,485Current liabilities of discontinued operations
    
    $
    814
    
    
    $
    15,075Total liabilities of discontinued operations
    
    $
    814
    
    
    $
    15,075Net liabilities of discontinued operations
    
    $
    (774
    )
    
    $
    (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 was 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 year to date period ended November 1, 2003, (in thousands):

Discontinued operations reserves

February 1, 2003
    
    Usage
    
    Transfers
    
    November 1, 2003Store closing*
    
    $
    12,653
    
    
    $
    (12,256
    )
    
    $
    286
    
    
    $
    683Taxes
    
    
    720
    
    
    
    (589
    )
    
    
    
    
    
    
    131Severance
    
    
    600
    
    
    
    (590
    )
    
    
    (10
    )
    
    
    Miscellaneous
    
    
    512
    
    
    
    (374
    )
    
    
    (138
    )
    
    
    Accounts payable
    
    
    590
    
    
    
    (452
    )
    
    
    (138
    )
    
    
    Total liabilities of discontinued operations
    
    $
    15,075
    
    
    $
    (14,261
    )
    
    $
    0
    
    
    $
    814




---

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

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4. OTHER COMPREHENSIVE INCOME (LOSS)

The Company reports accumulated other comprehensive income (loss) as a
separate item in the shareholders equity section of the consolidated balance
sheet. Other comprehensive income (loss) consists of foreign currency
translation adjustments. For the quarters ending November 1, 2003, and
November 2, 2002, the amounts were de minimis.

5. LONG-TERM DEBT

Long-term debt at November 1, 2003, and February 1, 2003, consisted of the
following (in thousands):

November 1, 2003
    
    February 1, 2003Senior notes
    
    $
    30,590
    
    
    $
    30,590Term B promissory note
    
    
    25,000
    
    
    
    25,000Senior credit facility
    
    
    56,770
    
    
    
    Checks written in excess of cash balances
    
    
    4,863
    
    
    
    Note payable
    
    
    120
    
    
    
    150Total debt
    
    $
    117,343
    
    
    $
    55,740Less: current portion
    
    
    (92,268
    )
    
    
    (45
    )Total long-term debt
    
    $
    25,075
    
    
    $
    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 an aggregate of $44.4 million
of the 11 1/4% Senior Notes in 1998, 1999 and 2000. As of February 1, 2003,
and November 1, 2003, the outstanding balance on the 11 1/4% Senior Notes was
$30.6 million. As of November 1, 2003, the 11 1/4% Senior Notes were
classified as current. The terms and conditions for these notes are more fully
discussed in Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations.

TERM B PROMISSORY NOTE AND REVOLVING CREDIT AGREEMENT

General Electric Capital Corporation and a syndicate of banks have
provided the Company with a senior credit facility (the "credit facility" or the "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 terms and conditions of this
facility and the Term B promissory note are more fully discussed in Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
Operations.

At November 1, 2003, and February 1, 2003, there were $56.8 million in
borrowings and no borrowings, respectively, under the revolving portion of the
credit facility. At November 1, 2003, and February 1, 2003, there were $24.0
and $15.2 million in letters of credit outstanding, respectively. The Term B
promissory note had a balance of $25.0 million on November 1, 2003, and
February 1, 2003.

6. LEGAL PROCEEDINGS

In January 2003, a class action was brought on behalf of current and
former store managers of Wilsons Leather in California regarding their
classification as exempt from overtime pay. In July 2003, the Company reached
a confidential settlement of the class action through mediation. In October
2003, the court granted preliminary approval of the settlement, with the
hearing on the final approval scheduled for January 2004. A charge of $1.9
million related to this settlement was taken during the second quarter of 2003.

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7. SUPPLEMENTAL BALANCE SHEET INFORMATION

November 1,
    
    February 1,(in thousands)
    
    2003
    
    2003Accounts receivable, net:Trade receivables
    
    $
    4,802
    
    
    $
    3,851Other receivables
    
    
    1,640
    
    
    
    1,524Total
    
    
    6,442
    
    
    
    5,375Less  Allowance for doubtful accounts
    
    
    (102
    )
    
    
    (145
    )Less  Deferred sales
    
    
    (44
    )
    
    
    (68
    )Total accounts receivable, net
    
    $
    6,296
    
    
    $
    5,162Inventories:Raw materials
    
    $
    3,896
    
    
    $
    2,872Finished goods
    
    
    170,624
    
    
    
    115,829Total inventories
    
    $
    174,520
    
    
    $
    118,701Property and equipment, net:Land
    
    $
    200
    
    
    $
    200Equipment and furniture
    
    
    93,798
    
    
    
    90,111Leasehold improvements
    
    
    33,709
    
    
    
    32,934Total
    
    
    127,707
    
    
    
    123,245Less  Accumulated depreciation
    
    
    (60,129
    )
    
    
    (49,271
    )Total property and equipment, net
    
    $
    67,578
    
    
    $
    73,974Goodwill and other assets, net:Goodwill
    
    $
    72
    
    
    $
    72Debt issuance costs
    
    
    7,002
    
    
    
    5,977Other assets
    
    
    186
    
    
    
    245Total
    
    
    7,260
    
    
    
    6,294Less  Accumulated amortization
    
    
    (4,260
    )
    
    
    (2,979
    )Total goodwill and other assets, net
    
    $
    3,000
    
    
    $
    3,315


8. SUBSEQUENT EVENT

On December 4, 2003, the Company reported a comparable store sales
decrease for the month of November 2003 of 16.5%. In December the Company
negotiated a waiver to the credit facility which waived compliance with the
minimum EBITDA covenant as of November 29, 2003. As a result of the waiver, as
of November 29, the Company was in compliance with all covenants related to the
credit facility. Comparable store sales trends for the month of December 2003
continue to decline in the high teens.

The Company anticipates that all outstanding indebtedness on the revolving
line of credit will be paid in full in December despite comparable store sales
in November and December. However, the Company anticipates that they will need
to seek an amendment to, or waiver of, the minimum EBITDA and other covenants
in the existing credit agreement to avoid a default at the end of January 2004
under those covenants. The Company continues to work with their lenders, but
there is no assurance that they will be able to obtain such an amendment or
waiver. If such an amendment to, or waiver under, the credit agreement is not
received by the end of January 2004, the Company will be in default under the
credit agreement. In that event, General Electric Capital Corporation would be
entitled to suspend the Companys right to borrow under the credit agreement
and could accelerate payment of the $25 million Term B promissory note.

In addition, the Companys $30.6 million of 11 1/4% Senior Notes become
due in August 2004. The credit agreement requires the Company to amend,
refund, renew, extend or refinance such 11 1/4% Senior Notes on or before June
15, 2004, and to deliver a plan with respect to such amendment, refunding,
renewal, extension or refinancing by April 30, 2004. The credit agreement also
places limitations on the interest rate and covenants applicable to such
amendment, refunding, renewal, extension or refinancing. For the reasons set
forth above, it could be difficult for the Company to obtain additional capital
on permitted terms in sufficient time to avoid a default under the credit
agreement or even if such default were waived, to pay the 11 1/4% Senior Notes
when due.

As a result of the November and December sales trends, it is likely that
the Company will need to re-evaluate their estimates related to certain
reserves. The Company may need to record a valuation allowance for deferred
income tax assets and increase their markdown reserve due to higher inventory
levels. The Company will re-evaluate their reserves during the fourth quarter
of 2003.







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 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. When we refer to we, our, us or Wilsons Leather, we mean
Wilsons The Leather Experts Inc. and its subsidiaries, including its
predecessor companies.

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 the continuing
operations of Wilsons Leather.

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 by rapidly replenishing fast-selling merchandise.

We kicked off a creative marketing campaign during the second quarter.
The campaign is called Discover, and is a platform to communicate the
quality, value, and features of our products. This campaign, which has a
four-pronged approach to build brand awareness and to communicate merchandise
attributes, will reach our customers through store signage and product tags,
external media such as newspaper inserts, and direct mail.

As of November 1, 2003, we operated a total of 607 permanent retail stores
located in 45 states and the District of Columbia, including 473 mall stores,
114 outlet stores and 20 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.

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Comparable store sales decreased 9.0% in the three months ended November
1, 2003, compared to a decrease of 6.8% in the same period of the prior year.
Comparable store sales decreased 4.9% in the year to date period ended November
1, 2003, compared to a 5.5% decrease 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.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 1, 2003,
COMPARED TO THE THREE MONTHS ENDED NOVEMBER 2, 2002

Net sales decreased 11.2% to $97.9 million in the three months ended
November 1, 2003, from $110.2 million in the comparable period last year. The
$12.3 million sales decrease was due to reduced sales volumes and a decline in
comparable store sales, primarily due to the unseasonably warm October weather
throughout most of the country, the general state of the economy, and the
delayed opening of and fewer total number of seasonal stores opened in 2003.

We opened 8 stores and closed 8 stores in the three months ended November
1, 2003, compared to opening 15 stores and closing 4 stores in the comparable
period last year. As of November 1, 2003, we operated 607 permanent and 172
seasonal stores compared to 628 permanent and 245 seasonal stores at November
2, 2002.

Cost of goods sold, buying and occupancy costs increased to 76.6% as a
percentage of net sales in 2003, from 76.1% of net sales in 2002, primarily due
to a decrease in sales volume. Cost of goods sold, buying and occupancy costs
increased 0.5% as a percentage of sales despite an $8.8 million decrease in
total cost as compared to 2002. This $8.8 million decrease from 2002 was due
to: (1) $5.1 million in lower cost of goods sold due to both the lower sales
volume and higher margin goods being sold in 2003 as compared to 2002, (2) a
$1.6 million decrease in markdowns, (3) $1.6 million in savings in occupancy
costs due to fewer stores open this year versus the prior year, and (4) a $0.5
million decrease in delivery and buying costs.

Selling, general and administrative expenses decreased to $35.1 million in
2003 from $40.5 million in 2002, and decreased as a percentage of net sales to
35.9% from 36.8% primarily due to year-over-year cost savings. The $5.4
million decrease was primarily due to cost savings realized as a result of
reduced staff levels at our headquarters and continued expense control at the
store level.

Depreciation and amortization increased to $4.2 million in 2003 from $3.9
million in 2002, and increased as a percentage of net sales to 4.3% from 3.6%.
The increase resulted primarily from accelerated depreciation of $0.2 million
related to the assets of stores we plan to close later in 2003.

As a result of the above, the operating loss decreased to a net loss of
$16.5 million, or 16.8% of net sales, in 2003 from a loss of $18.1 million, or
16.4% of net sales, in 2002.

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Net interest expense decreased to $2.9 million in 2003 from $3.2 million
in 2002 due to reduced short-term borrowings.

The income tax benefit was $7.7 million in 2003 compared to $8.5 million
in 2002. The effective rate of 40% remained constant from 2002 to 2003.

Net loss from continuing operations for 2003 was $11.6 million compared to
$12.8 million in 2002.

There was no loss from discontinued operations in 2003 compared to a $4.2
million loss in 2002.

RESULTS OF OPERATIONS FOR THE YEAR TO DATE PERIOD ENDED NOVEMBER 1, 2003,
COMPARED TO THE YEAR TO DATE PERIOD ENDED NOVEMBER 2, 2002

Net sales decreased 5.8% to $252.9 million in the year to date period
ended November 1, 2003, from $268.4 million in the comparable period last year.
The $15.5 million sales decrease was due to reduced sales volumes, a decline
in comparable store sales and the general state of the economy.

We opened 16 stores and closed 27 stores in the year to date period ended
November 1, 2003, compared to opening 30 stores and closing 21 stores in the
comparable period last year.

Cost of goods sold, buying and occupancy costs increased to 82.6% as a
percentage of net sales in 2003, from 80.6% of net sales in 2002, primarily due
to a decrease in sales over the prior year. Cost of goods sold, buying and
occupancy costs increased 2.0% as a percentage of sales despite a $7.4 million
decrease in total cost as compared to 2002. This $7.4 million decrease from
2002 was primarily due to: (1) $8.6 million in lower cost of goods sold due to
both the lower sales volume and higher margin goods being sold in 2003 as
compared to 2002, and (2) $1.4 million in lower buying and occupancy costs,
resulting primarily from a reduction in store counts, offset by (3) $2.6
million in higher markdowns to clear fall 2002 merchandise.

Selling, general and administrative expenses decreased to $100.4 million
in 2003 from $106.8 million in 2002, and decreased as a percentage of net sales
to 39.7% from 39.8%, primarily due to year-over-year expense reductions. The
$6.4 million decrease was primarily due to: (1) a $6.4 million decrease in
store selling expenses, of which payroll expense savings account for $4.5
million, (2) $0.9 million in savings in recruiting and relocation expenses due
to less hiring activity, (3) $1.0 million in payroll expense savings for
severance benefits accrued in 2002, (4) $0.7 million in miscellaneous general
administrative cost savings, and (5) $2.1 million in general cost savings
resulting from lower headcount at our headquarters location and cost savings
initiatives throughout the selling and support functions at the store level,
offset by (6) a $2.0 million increase in legal fees related to the settlement
of a class action, (7) a $1.7 million increase in employee benefit and
insurance costs due to increased levels of claims and rate increases, and (8) a
$1.0 million increase in professional service fees compared to 2002, primarily
for Sarbanes-Oxley internal controls implementation, tax-related projects, and
required audits under our senior credit facility and inventory appraisals.

Depreciation and amortization increased to $12.5 million in 2003 from
$11.5 million in 2002, and increased as a percentage of net sales to 5.0% from
4.3%. The increase primarily resulted from accelerated depreciation of $0.7 million related to the assets of stores
we plan to close later in 2003.

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As a result of the above, the operating loss increased to a net loss of
$69.0 million, or 27.3% of net sales, in 2003 from a loss of $66.2 million, or
24.7% of net sales, in 2002.

Net interest expense increased to $7.6 million in 2003 from $7.3 million
in 2002 due to amortization of higher debt acquisition costs related to the
April 2003 refinancing of our senior credit facility discussed below, offset by
decreased short-term borrowings.

The income tax benefit was $30.6 million in 2003 compared to $29.4 million
in 2002. The effective rate of 40% remained constant from 2002 to 2003.

Net loss from continuing operations for 2003 was $46.0 million compared to
$44.1 million in 2002.

There was no loss from discontinued operations in 2003 compared to a $14.6
million loss in 2002.

SUBSEQUENT EVENT

As discussed in Note 8 to the consolidated financial statements included
herein, we have experienced comparable store sales decreases in the high teens
during both November and December. As a result, it is likely that we will need
to re-evaluate our estimates related to certain reserves. We may need to
record a valuation allowance for our deferred income tax assets and increase
our markdown reserve due to higher inventory levels. We will be re-evaluating
our reserves during the fourth quarter of 2003.

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. 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. As of November 1, 2003, and February 1,
2003, the amount of goodwill was de minimis.

Under the transitional provisions of SFAS No. 142, our 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 our 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. We defined our reporting units 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 impairment test, we 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 our statement of
operations for the year to date period ended August 3, 2002.

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.

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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 shifted consumer spending habits toward large discount retailers,
which has decreased mall traffic, resulting in lower net sales 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.

General Electric Capital Corporation and a syndicate of banks have
provided us with a senior credit facility, which was amended on
April 11, 2003, (the senior credit facility or the
credit agreement)
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

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     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.

Peak
borrowings typically occur from October through December and
outstanding letters of credit typically peak from August through
September.
As of November 1, 2003, we had $56.8 million in borrowings under the
revolving portion of the credit facility, $25.0 million under the Term B promissory note, and $24.0 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 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, referred to below, except pursuant to a permitted
refinancing; create liens or other encumbrances; or pay cash dividends or make
other distributions.

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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.

In our December 4, 2003 sales release, we reported a comparable store
sales decrease for the month of November 2003 of 16.5%. In December we
negotiated a waiver to the credit facility which waived compliance with the
minimum EBITDA covenant as of November 29, 2003. As a result of the waiver, as
of November 29, we were in compliance with all covenants related to our credit
agreement. Comparable store sales trends for the month of December 2003
continue to decline in the high teens.

We anticipate that we will pay all outstanding indebtedness on our
revolving line of credit in full in December despite our comparable store sales
in November and December. However, we anticipate that we will need to seek an
amendment to, or waiver of, the minimum EBITDA and other covenants in our
existing credit agreement to avoid a default at the end of January 2004 under
those covenants. We will continue to work with our lenders, but there is no
assurance that we will be able to obtain such an amendment or waiver. If we do
not receive such an amendment to, or waiver under, our credit agreement by the
end of January 2004, we will be in default under our credit agreement. In that
event, General Electric Capital Corporation would be entitled to suspend our
right to borrow under our credit agreement and could accelerate payment of our
$25 million Term B promissory note.

In addition, our $30.6 million of 11 1/4% Senior Notes become due in
August 2004. Our credit agreement requires us to amend, refund, renew, extend
or refinance such 11 1/4% Senior Notes on or before June 15, 2004, and to
deliver a plan with respect to such amendment, refunding, renewal, extension or
refinancing by April 30, 2004. Our credit agreement also places limitations on
the interest rate and covenants applicable to such amendment, refunding,
renewal, extension or refinancing. For the reasons set forth above, it could
be difficult for us to obtain additional capital on permitted terms in
sufficient time to avoid a default under our credit agreement or even if such
default were waived, to pay the 11 1/4% Senior Notes when due.

We are dependent on the senior credit facility to fund our future 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 are able to obtain the waivers of amendments to the
credit agreement referred to above and 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 $75.0 million of
11 1/4% Senior Notes to certain institutional 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 currently callable at par. 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. The Company repurchased an aggregate of
$44.4 million of the 111⁄4% Senior Notes in 1998, 1999 and 2000. As of November
1, 2003, we had $30.6 million of our 11 1/4% Senior Notes outstanding, all of
which was classified as current.

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,
we reborrowed $4.8 million of the Term B promissory note, which
brought the outstanding balance to $25.0 million.

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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 to the consolidated financial statements (unaudited) contained
herein.

CASH FLOW ANALYSIS

Operating activities of continuing operations for the year to date period
ended November 1, 2003, resulted in cash used of $74.9 million compared to cash
used of $163.2 million in the corresponding period of 2002.

The $74.9 million of cash used in operating activities for the year to
date period ended November 1, 2003, was comprised of: (1) a $13.0 million
increase in deferred income tax, (2) a net loss from continuing operations of
$46.0 million, (3) a $55.8 million increase in inventories due to the receipt
of merchandise for the holiday season, (4) a $5.3 million increase in prepaids
due to timing of rent payments and an increase in prepaid insurance due to a
policy renewal during the second quarter, and (5) a $1.1 million increase in
accounts receivable from construction allowances for new stores, offset by (6)
a $27.0 million increase in accrued expenses and accounts payable due to the
seasonality of the business, (7) a $13.8 million non-cash adjustment for
depreciation and amortization expense, (8) $5.1 million provided by decreased
refundable taxes and increased income taxes payable and other liabilities, and
(9) $0.4 million in cash provided by various other operating activities.

We had $163.2 million in cash used by operating activities during the same
period last year as a result of: (1) a $112.5 million increase in inventories,
(2) a net loss from continuing operations of $44.1 million, (3) a $9.5 million
increase in prepaid expenses due to the timing of November 2002 rent payments,
and an increase in prepaid insurance due to a policy renewal during the second
quarter, (4) a $31.9 million change in income taxes refundable/payable and
other liabilities due to reduced income, and (5) an $8.1 million change in
deferred taxes, offset by (6) $12.5 million in non-cash adjustments for
depreciation and amortization and loss on disposal of assets, (7) a $28.2
million increase in accounts payable and accrued expenses, (8) a $1.9 million
decrease in accounts receivable, and (9) $0.3 million in cash provided by
various other operating activities.

Investing activities of continuing operations for the year to date period
ended November 1, 2003, were comprised of $6.3 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 $6.9 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, offset by $12.5 million in cash provided by the sale/leaseback of the
headquarters facility. For 2003, capital expenditures cannot exceed $10.0
million.

Cash provided by financing activities of continuing operations for the
year to date period ended November 1, 2003, was $61.5 million, which was
primarily $61.6 million provided by revolver financing and checks written in
excess of cash balances and $0.9 million from the issuance of common stock and
exercise of stock options, offset by $1.0 million used for debt acquisition
costs. Cash provided by financing activities during the same period last year
was $140.7 million. This included $134.0 million provided by revolver
financing and checks written in excess of cash balances, $12.8 million from the
issuance of common stock and exercise of stock options, and $0.2

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million from the issuance of long-term debt, offset by $4.8 million used
for repayment of long-term debt, and $1.5 million used for debt acquisition
costs.

OFF-BALANCE-SHEET ARRANGEMENTS

We have no off-balance-sheet 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 are
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 January 2003, the FASB issued FIN No. 46, Consolidation of Variable
Interest Entities. FIN No. 46 states that companies that have exposure to
economic risks and potential rewards from another entitys assets and
activities have a controlling financial interest in a variable interest entity
and should consolidate the entity, despite the absence of clear control through
a voting equity interest. The consolidation requirements apply to all variable
interest entities created after January 31, 2003. For variable interest
entities that existed prior to February 1, 2003, FASB Staff Position No. 46-6
delayed the consolidation requirements until annual or interim periods ending
after December 15, 2003. Disclosure of significant variable interest entities
is required in all financial statements issued after January 31, 2003,
regardless of when the variable interest was created. FIN No. 46 did not have
an impact on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity.
SFAS No. 150 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 an asset in some circumstances). Many of
those instruments were previously classified as equity. We do not
have any financial instruments outstanding to which the provisions of SFAS No.
150 apply and therefore SFAS No. 150 did not have an impact on
our
consolidated financial statements.

In December 2002, the EITF issued EITF 00-21, Revenue Arrangements with
Multiple Deliverables.EITF 00-21 addresses certain aspects of the accounting
for arrangements under

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which a company will perform multiple revenue generating activities. In
some arrangements, the different revenue generating activities (deliverables)
are sufficiently separable, and there exists sufficient evidence of their fair
values to separately account for some or all of the deliverables (that is,
there are separate units of accounting). In other arrangements, some or all of
the deliverables are not independently functional, or there is not sufficient
evidence of their fair values to account for them separately. EITF 00-21
addresses the circumstances under which an arrangement involving multiple
deliverables should be divided into separate units of accounting. EITF 00-21
does not change otherwise applicable revenue recognition criteria. The
provisions of EITF 00-21 were effective beginning in the third quarter of 2003.
The adoption of EITF 00-21 did not have an impact on revenue recognition.



---

Except
for historical information, matters discussed in Item 2. 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:
unseasonable weather; seasonality of the business; economic downturns; 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; changes
in customer shopping patterns; change in consumer preferences and fashion
trends away from leather; 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 our
corporate offices and distribution centers. Certain of these risk factors are
more fully discussed in our 2002 Annual Report on Form 10-K for the
fiscal year ended February 1, 2003.







ITEM 3. QUANTITIATIVE AND QUALITATIVE DISCLOSURES 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 senior credit facility, interest
expense would increase or decrease accordingly. As of November 1, 2003, we had
$56.8 million in borrowings under the revolving portion of the credit facility, $25.0 million under the Term B promissory
note, and $24.0 million in outstanding letters of credit.

We have no earnings or cash flow exposure due to market risks on our
fixed-rate debt obligations. However, interest rate changes would affect the
fair market value of the debt. At November 1, 2003, we had fixed rate debt of
$30.6 million maturing in August 2004.







ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an
evaluation, under the supervision and with the participation of the principal
executive officer and principal financial officer, of our disclosure controls
and procedures (as defined in Rules 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act). Based on this
evaluation, the principal executive officer and principal financial officer
concluded that our disclosure controls and procedures are effective to ensure
that information we are required to disclose in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms. There was no change in our internal control over financial reporting
during our most recently completed fiscal quarter that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.

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PART II  OTHER INFORMATION







ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

See Part
I., Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources contained herein 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

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, and May 23, 2002. (1)
    
    Incorporated by
Reference4.1
    
    Specimen of common stock certificate. (2)
    
    Incorporated by
Reference4.2
    
    Indenture dated as of August 18, 1997, by and among Wilsons The
Leather Experts Inc., the other corporations listed on the signature
pages thereof, and Wells Fargo Bank Minnesota, National Association
(formerly known as Norwest Bank Minnesota, National Association),
including specimen Certificate of 11 1/4% Series A Senior Notes due
2004 and specimen Certificate of 11 1/4% Series B Senior Notes due
2004. (3)
    
    Incorporated by
Reference4.3
    
    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


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ExhibitNo.
    
    Description
    
    Method of Filing4.4
    
    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
Reference4.5
    
    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
Reference4.6
    
    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
Reference4.7
    
    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
Reference10.1
    
    Wilsons The Leather Experts Inc. 2000 Long Term Incentive Plan, as
amended on August 24, 2000, March 21, 2002, June 11, 2003, and
September 18, 2003. (9)
    
    Incorporated by
Reference10.2
    
    Wilsons The Leather Experts Inc. Employee Stock Purchase Plan, as
amended on June 11, 2003. (10)
    
    Incorporated by
Reference31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
    
    Electronic Transmission31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
    
    Electronic Transmission32.1
    
    Section 1350 Certifications.
    
    Electronic Transmission




|(1) |  | Incorporated by reference to the same numbered exhibit to the Companys
Report on Form 10-Q for the quarter ended August 3, 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).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|(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.
|--- |  | ----------------------------------------------------------------------------------------------------------------------



|(9) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration
Statement on Form S-8 (333-109977) filed with the Commission on October
24, 2003.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|(10) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration
Statement on Form S-8 (333-109976) filed with the Commission on October
24, 2003.
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

B. Report on Form 8-K: The Company filed one Report on Form 8-K during the
third quarter ended November 1, 2003: On August 19, 2003, the Company announced
its second quarter earnings for the period ended August 2, 2003.

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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. MichieluttiPeter G. Michielutti
Executive Vice President and
Chief Financial Officer


Date:  December 16, 2003

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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, and May 23, 2002. (1)
    
    Incorporated by
Reference4.1
    
    Specimen of common stock certificate. (2)
    
    Incorporated by
Reference4.2
    
    Indenture dated as of August 18, 1997, by and among Wilsons The
Leather Experts Inc., the other corporations listed on the signature
pages thereof, and Wells Fargo Bank Minnesota, National Association
(formerly known as Norwest Bank Minnesota, National Association),
including specimen Certificate of 11 1/4% Series A Senior Notes due
2004 and specimen Certificate of 11 1/4% Series B Senior Notes due
2004. (3)
    
    Incorporated by
Reference4.3
    
    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
Reference4.4
    
    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
Reference4.5
    
    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
Reference4.6
    
    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


27



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##### Table of Contents



ExhibitNo.
    
    Description
    
    Method of Filing4.7
    
    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
Reference10.1
    
    Wilsons The Leather Experts Inc. 2000 Long Term Incentive Plan, as
amended on August 24, 2000, March 21, 2002, June 11, 2003, and
September 18, 2003. (9)
    
    Incorporated by
Reference10.2
    
    Wilsons The Leather Experts Inc. Employee Stock Purchase Plan, as
amended on June 11, 2003. (10)
    
    Incorporated by
Reference31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
    
    Electronic Transmission31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
    
    Electronic Transmission32.1
    
    Section 1350 Certifications.
    
    Electronic Transmission




|(1) |  | Incorporated by reference to the same numbered exhibit to the Companys
Report on Form 10-Q for the quarter ended August 3, 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.
|--- |  | ----------------------------------------------------------------------------------------------------------------------



|(9) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration
Statement on Form S-8 (333-109977) filed with the Commission on October
24, 2003.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|(10) |  | Incorporated by reference to Exhibit 99.1 to the Companys Registration
Statement on Form S-8 (333-109976) filed with the Commission on October
24, 2003.
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

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