<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark one)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                  For the quarterly period ended August 4, 2001

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

        For the transition period from _______________ to _______________

                        Commission file number 000-21543



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

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

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

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



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.                     Yes [X]    No [ ]

As of September 3, 2001, there were 17,262,205 shares of common stock, $0.01 par
value per share, outstanding.

                                       1
<PAGE>

                        WILSONS THE LEATHER EXPERTS INC.
                                     INDEX

                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

     Item 1.  Consolidated Financial Statements

              Consolidated Balance Sheets as of August 4, 2001,
              February 3, 2001 and July 29, 2000                               3

              Consolidated Statements of Operations for the
              three months ended August 4, 2001 and July 29, 2000              4

              Consolidated Statements of Operations for the
              six months ended August 4, 2001 and July 29, 2000                5

              Consolidated Statements of Cash Flows for the
              six months ended August 4, 2001 and July 29, 2000                6

              Notes to Consolidated Financial Statements                       7

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

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk      14


PART II - OTHER INFORMATION

     Item 2.  Changes in Securities                                           16

     Item 4.  Submission of Matters to a Vote of Security Holders             16

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

     Signature                                                                19

     Index to Exhibits                                                        20

                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                         AUGUST 4,   FEBRUARY 3    JULY 29,
             ASSETS                                        2001         2001 *       2000
             ------                                      ---------    ---------   ---------
                                                        (Unaudited)              (Unaudited)
<S>                                                      <C>          <C>         <C>
CURRENT ASSETS:
   Cash and cash equivalents                             $   3,646    $  52,122   $   4,586
   Accounts receivable, net                                 15,339       11,640      10,069
   Inventories                                             183,687      129,412     125,249
   Prepaid expenses and other current assets                 6,880       11,622       6,411
                                                         ---------    ---------   ---------
       Total current assets                                209,552      204,796     146,315

PROPERTY AND EQUIPMENT, net                                107,583       82,428      58,572
OTHER ASSETS, net                                           41,465       28,615       1,565
                                                         ---------    ---------   ---------
       Total assets                                      $ 358,600    $ 315,839   $ 206,452
                                                         =========    =========   =========

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

CURRENT LIABILITIES:
   Accounts payable                                      $  23,120    $  17,803   $  18,799
   Notes payable                                            86,200           --          --
   Accrued expenses                                         31,616       45,999      32,781
   Income taxes payable                                      2,723       38,025       4,625
   Deferred income taxes                                     2,776        2,305          --
                                                         ---------    ---------   ---------
       Total current liabilities                           146,435      104,132      56,205

LONG-TERM DEBT                                              55,590       30,590      30,590
OTHER LONG-TERM LIABILITIES                                  3,346        4,934       3,670
                                                         ---------    ---------   ---------
       Total liabilities                                   205,371      139,656      90,465
                                                         ---------    ---------   ---------

COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
   Common stock, $.01 par value; 150,000,000 shares
     authorized, 17,251,647, 16,885,750 and 16,745,917
     shares issued and outstanding on August 4, 2001,
   February 3, 2001 and July 29, 2000, respectively            173          169         167
   Additional paid-in capital                               65,452       60,495      59,000
   Retained earnings                                        89,015      115,490      56,803
   Unearned compensation                                    (1,439)          --          --
   Cumulative other comprehensive income                        28           29          17
                                                         ---------    ---------   ---------
       Total shareholders' equity                          153,229      176,183     115,987
                                                         ---------    ---------   ---------
       Total liabilities and shareholders' equity        $ 358,600    $ 315,839   $ 206,452
                                                         =========    =========   =========
</TABLE>

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

           * - Derived from audited consolidated financial statements.

                                       3
<PAGE>

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

                                                            THREE MONTHS ENDED
                                                          ---------------------
                                                          AUGUST 4,     JULY 29,
                                                            2001         2000
                                                          --------     --------

NET SALES                                                 $ 94,165     $ 56,551
     COST OF GOODS SOLD, BUYING AND
          OCCUPANCY COSTS                                   84,039       49,633
                                                          --------     --------
         Gross Margin                                       10,126        6,918

     SELLING, GENERAL AND
          ADMINISTRATIVE EXPENSES                           40,556       29,708
     DEPRECIATION AND AMORTIZATION                           5,460        2,393
                                                          --------     --------
         Loss from operations                              (35,890)     (25,183)
     INTEREST EXPENSE, net                                   2,103          488
                                                          --------     --------
         Loss before income taxes                          (37,993)     (25,671)
     INCOME TAX BENEFIT                                    (15,197)     (10,269)
                                                          --------     --------
         Net loss                                         $(22,796)    $(15,402)
                                                          ========     ========

NET LOSS PER COMMON SHARE -
     BASIC AND DILUTED
     Net loss per common share - basic and diluted        $  (1.32)    $  (0.92)
                                                          ========     ========

Weighted average common shares
    outstanding - basic and diluted                         17,210       16,717
                                                          ========     ========

                                       4
<PAGE>

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

                                                             SIX MONTHS ENDED
                                                         ----------------------
                                                          AUGUST 4,     JULY 29,
                                                            2001         2000
                                                         ---------    ---------

NET SALES                                                $ 211,642    $ 146,859
     COST OF GOODS SOLD, BUYING AND
          OCCUPANCY COSTS                                  165,867      109,827
                                                         ---------    ---------
        Gross Margin                                        45,775       37,032

     SELLING, GENERAL AND ADMINISTRATIVE
          EXPENSES                                          77,240       59,554
     DEPRECIATION AND AMORTIZATION                           9,793        4,396
                                                         ---------    ---------
         Loss from operations                              (41,258)     (26,918)
     INTEREST EXPENSE, net                                   2,865           11
                                                         ---------    ---------
         Loss before income taxes                          (44,123)     (26,929)
     INCOME TAX BENEFIT                                    (17,649)     (10,772)
                                                         ---------    ---------
         Loss before extraordinary item                    (26,474)     (16,157)
     EXTRAORDINARY LOSS ON EARLY
          EXTINGUISHMENT OF DEBT, net of tax of $410            --         (623)
                                                         ---------    ---------

         Net loss                                        $ (26,474)   $ (16,780)
                                                         =========    =========

NET LOSS PER COMMON SHARE -
     BASIC AND DILUTED:
     Loss before extraordinary item                      $   (1.55)   $   (0.97)
     Extraordinary loss on early extinguishment
         of debt, net of tax                                    --        (0.04)
                                                         ---------    ---------
     Net loss per common share - basic and diluted       $   (1.55)   $   (1.01)
                                                         =========    =========

Weighted average common shares
    outstanding - basic and diluted                         17,092       16,687
                                                         =========    =========

                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                                                   SIX MONTHS ENDED
                                                                ----------------------
                                                                 AUGUST 4,    JULY 29,
                                                                   2001         2000
                                                                ---------    ---------
<S>                                                             <C>          <C>
OPERATING ACTIVITIES:
    Net loss                                                    $ (26,474)   $ (16,780)
    Adjustments to reconcile net loss to net cash used in
      operating activities-
      Extraordinary loss on early extinguishment of debt               --          623
      Depreciation and amortization                                 9,793        4,396
      Amortization of deferred financing costs                        314          207
      Loss (gain) on disposal of assets                               250          (72)
      Restricted stock compensation expense                           131           --
      Deferred income taxes                                         2,936       (1,156)
      Changes in operating assets and liabilities:
          Accounts receivable, net                                 (2,269)      (2,522)
          Inventories                                             (36,981)     (46,028)
          Prepaid expenses                                          3,074        4,022
          Accounts payable and accrued expenses                   (22,770)      (6,981)
          Income taxes payable and other liabilities              (34,388)     (29,729)
                                                                ---------    ---------
              Net cash used in operating activities              (106,384)     (94,020)
                                                                ---------    ---------

INVESTING ACTIVITIES:
      Additions to property and equipment                         (21,873)     (13,361)
      Acquisitions                                                (33,452)          --
                                                                ---------    ---------
          Net cash used in investing activities                   (55,325)     (13,361)
                                                                ---------    ---------

FINANCING ACTIVITIES:
      Proceeds from issuance of common stock, net                   2,027          989
      Change in notes payable                                      86,200           --
      Repayment of long-term debt                                  25,000      (13,300)
      Other Financing                                                   6         (648)
                                                                ---------    ---------
          Net cash provided by (used in) financing activities     113,233      (12,959)
                                                                ---------    ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS                         (48,476)    (120,340)
CASH AND CASH EQUIVALENTS, beginning of period                     52,122      124,926
                                                                ---------    ---------
CASH AND CASH EQUIVALENTS, end of period                        $   3,646    $   4,586
                                                                =========    =========

SUPPLEMENTAL CASH FLOW INFORMATION:

      Cash paid during the period for-
          Interest                                              $   4,261    $   2,771
                                                                =========    =========
          Income taxes                                          $  14,362    $  19,660
                                                                =========    =========
</TABLE>

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

                                       6
<PAGE>

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


1.       NATURE OF ORGANIZATION

         Wilsons The Leather Experts Inc. (Wilsons Leather or the Company), a
Minnesota corporation, is the leading specialty retailer of quality leather
outerwear, accessories, apparel and travel products in the United States. As of
August 4, 2001, the Company operated 751 retail stores located in 46 states, the
District of Columbia, Guam, Puerto Rico, Canada and the United Kingdom,
including 479 mall stores, 91 outlet stores and 37 airport locations under the
Wilsons Leather format and 144 premium travel products and accessories stores
under the travel store format. The Company supplemented permanent mall stores
with 239 seasonal stores during its peak selling season from October through
December during the year ended February 3, 2001.

2.       BASIS OF FINANCIAL STATEMENT PRESENTATION

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

         The accompanying unaudited financial statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosure, normally included in
financial statements prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules and
regulations. Although management believes that the accompanying disclosures are
adequate to make the information presented not misleading, it is recommended
that these interim financial statements be read in conjunction with the
Company's most recent audited financial statements and related notes included in
its 2000 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
February 2, 2002.

3.       INVENTORIES

         Inventories, principally finished goods, consist of merchandise
purchased from domestic and foreign vendors and are carried at the lower of cost
or market value, determined by the retail inventory method on the last-in,
first-out (LIFO) basis. Quarterly inventory determinations under LIFO are
partially based on assumptions as to inventory levels at the end of the fiscal
year, sales and the projected rate of inflation for the year. The difference in
inventories between LIFO and the first-in, first-out method (FIFO) was not
material as of August 4, 2001.

                                       7
<PAGE>

4.       EXTRAORDINARY LOSS

         The Company repurchased $13.3 million of its 11-1/4% senior notes,
which are due 2004, in the previous fiscal year. The Company incurred an
extraordinary loss, net of tax, of approximately $0.6 million for the early
extinguishment of debt.

5.       NET LOSS PER SHARE

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

<TABLE>
<CAPTION>
                                     Three Months       Three Months     Six Months       Six Months
                                         Ended             Ended           Ended            Ended
                                    August 4, 2001     July 29, 2000   August 4, 2001   July 29, 2000
                                    --------------     -------------   --------------   -------------
<S>                                     <C>              <C>              <C>              <C>
Net loss                                $(22,796)        $(15,402)        $(26,474)        $(16,780)
                                        ========         ========         ========         ========

Weighted average common shares
  outstanding - basic                     17,210           16,717           17,092           16,687
Dilutive potential common shares              --               --               --               --
                                        --------         --------         --------         --------

Weighted average common shares
  outstanding - basic and
  diluted                                 17,210           16,717           17,092           16,687
                                        ========         ========         ========         ========

Basic and diluted net loss per
  common share                          $  (1.32)        $  (0.92)        $  (1.55)        $  (1.01)
                                        ========         ========         ========         ========
</TABLE>

6.       ACQUISITIONS

         On October 31, 2000, the Company acquired all of the outstanding common
shares of El Portal Group, Inc. (El Portal), a specialty retailer of premium
travel products and accessories, for approximately $15.4 million excluding
assumed debt of approximately $13.8 million. The acquisition was funded with
cash from working capital and the Company's senior credit facility (as herein
defined). On April 13, 2001, the Company acquired all of the outstanding shares
of Bentley's Luggage Corp. (Bentley's), a specialty retailer of travel products
and accessories, for approximately $34.0 million, subject to certain
post-closing adjustments. The acquisition was funded with cash from working
capital and the Company's senior credit facility. The Company accounted for both
acquisitions under the purchase method of accounting. Accordingly, the purchase
prices were allocated to the assets acquired and liabilities assumed based on
their estimated fair market values at the date of acquisition. Certain of the
liabilities assumed have been recorded based upon preliminary estimates as of
the date of the acquisitions. The excess of the

                                       8
<PAGE>

purchase prices over the fair market value of the net assets acquired was
allocated to goodwill and other intangibles. Results of operations of El Portal
and Bentley's have been included in the accompanying consolidated financial
statements since the date of acquisition.

         The following unaudited pro forma information presents the results of
operations as if the acquisitions had been completed as of January 30, 2000 (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                     Six Months Ended    Six Months Ended
                                                      August 4, 2001      July 29, 2000
                                                     ----------------    ----------------

<S>                                                        <C>                <C>
         Revenue                                           $229,891           $217,007
         Net loss before extraordinary item                (28,859)           (16,215)
         Net loss                                          (28,859)           (16,838)

         Net loss before extraordinary item per
              common share - basic and diluted               (1.69)              (.97)
         Net loss per common share - basic and diluted       (1.69)             (1.01)

         Weighted average common shares
              outstanding - basic and diluted                17,092             16,687
</TABLE>

         The unaudited pro forma consolidated financial information does not
purport to represent what the Company's financial position or results of
operations would actually have been if these transactions had occurred at such
dates or project the Company's future results of operations.

7.       OTHER COMPREHENSIVE INCOME

         The Company reports cumulative other comprehensive income as a separate
item in the shareholders' equity section of the balance sheet. Other
comprehensive income consists of foreign currency translation adjustments. For
the quarter ending August 4, 2001, there was other comprehensive income of
$28,000. For the quarter ending July 29, 2000, there was other comprehensive
income of $17,000.

8.       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT

         Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities," as amended, became effective
for the years beginning after June 15, 2000. SFAS No. 133 establishes accounting
and reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allows a derivative's gains or losses to offset related
results on the hedged item in the income statement and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. The Company's only derivative instrument was an
interest rate swap with First Union National Bank (First Union), which
terminated on August 15, 2001. The

                                       9
<PAGE>

Company adopted SFAS No. 133 on February 4, 2001 and this adoption did not have
a material effect on the Company's financial position or results of operations
or other comprehensive income.

         On June 29, 2001, the FASB approved for issuance SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Intangible Assets."
Major provisions of these Statements are as follows: all business combinations
initiated after June 30, 2001 must use the purchase method of accounting; the
pooling of interest method of accounting is prohibited except for transactions
initiated before July 1, 2001; intangible assets acquired in a business
combination must be recorded separately from goodwill if they arise from
contractual or other legal rights or are separable from the acquired entity and
can be sold, transferred, licensed, rented or exchanged, either individually or
as part of a related contract, asset or liability; goodwill and intangible
assets with indefinite lives are not amortized, but are tested for impairment
annually, except in certain circumstances, and whenever there is an impairment
indicator; all acquired goodwill must be assigned to reporting units for
purposes of impairment testing and segment reporting; effective January 2, 2002,
goodwill will no longer be subject to amortization. Management is currently
reviewing the provisions of these Statements and their impact on the Company's
results of operations.


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

         The following discussion of the financial condition and results of
operations of Wilsons The Leather Experts Inc. and its wholly owned subsidiaries
(Wilsons Leather or the Company) should be read in conjunction with the
Company's most recent audited financial statements and related notes included in
its 2000 Annual Report on Form 10-K.

OVERVIEW

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

         At August 4, 2001, we operated a total of 751 stores located in 46
states, the District of Columbia, Guam, Puerto Rico, Canada and the United
Kingdom. Our Wilsons Leather concept included 479 mall stores, 91 outlet stores
and 37 airport locations. Each year we supplement our permanent stores with
temporary holiday stores during our peak holiday season, which totaled 239 in
2000. Our Wilsons Leather mall stores average approximately 2,100 square feet
and feature a large assortment of both classic and fashion-forward leather
outerwear, apparel and accessories priced as an excellent value to our
customers. Our outlet stores are operated primarily under the Wilsons Leather
Outlet name, average approximately 2,400 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
600 square feet, feature travel products as well as leather accessories, and
provide us the opportunity to showcase our products and the

                                       10
<PAGE>

Wilsons Leather brand to millions of potential customers each year in some of
the world's busiest airports. Our proprietary labels, including M. Julian(R),
Maxima(R), Pelle Studio(R) and Wilsons Leather(TM), are positioned to appeal to
identified customer lifestyle segments.

         Through our recent acquisitions of Bentley's and El Portal, we created
the leading specialty retail chain of travel products and accessories in the
United States. At August 4, 2001, we operated 39 premium travel products and
accessories stores under the El Portal and California Luggage Outlet names in 5
states and Guam and 105 Bentley's stores in 22 states and Puerto Rico. Our
travel stores average approximately 2,700 square feet and feature premium
nationally-branded merchandise, including Tumi(TM), Hartmann(TM), Swiss
Army(TM), Travlepro(R) and Kenneth Cole(R).

         Wilsons House of Suede, Inc., one of the predecessor companies, was
founded in the late 1940s and was acquired by CVS New York, Inc. (CVS) in 1982.
Following this acquisition, CVS acquired both Berman's The Leather Experts, Inc.
in 1988 and Georgetown Leather Design in 1993 to become a leading specialty
retailer of leather apparel and accessories with over 500 stores nationally. In
May 1996, members of our current management participated in a management buyout
from CVS.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 4, 2001 COMPARED TO THE
THREE MONTHS ENDED JULY 29, 2000

         Net sales increased 66.5% to $94.2 million in 2001 from $56.6 million
in 2000. Contributing to the $37.6 million sales increase were (i) a $4.0
million, or 7.6%, comparable store sales decrease, and (ii) a $41.6 million
increase in non-comparable store sales due to stores that have been open less
than one year and the acquisition of El Portal and Bentley's.

         Wilsons Leather opened 28 stores and closed 8 stores in the second
quarter ended August 4, 2001 compared to opening 15 stores and closing 4 stores
during the second quarter last year. Included in the 28 stores opened in the
second quarter of 2001 are 8 mall, 15 outlet, 3 airport and 2 travel stores. As
of August 4, 2001, Wilsons Leather operated 751 stores compared to 547 stores at
July 29, 2000.

         Cost of goods sold, buying and occupancy costs for the second quarter
of 2001 were 89.3% of net sales, or $84.0 million, compared to 87.8% of sales,
or $49.6 million, for the same period a year ago. The increase of 1.5 points as
a percentage of net sales is related to a decrease in gross margin net of
occupancy and buying costs. Gross margin net of occupancy and buying costs
decreased for the quarter as compared to last year due primarily to decreased
sales of higher margin fashion merchandise and higher markdowns as a result of
higher levels of clearance merchandise at the beginning of the quarter offset by
slightly higher margin sales in the travel-related business. The Company's
inventories are valued under the retail inventory method on the LIFO basis. The
difference in inventories between LIFO and the FIFO method was not material as
of August 4, 2001 and July 29, 2000.

         Selling, general and administrative expenses for the second quarter of
2001 were 43.1% of net sales, or $40.6 million, compared to 52.5% of net sales,
or $29.7 million, for the same period last year. The decrease as a percentage of
sales was due mainly to cost savings initiatives implemented in the second
quarter.

                                       11
<PAGE>

         Depreciation and amortization expense increased to $5.5 million from
$2.4 million last year, and increased as a percentage of net sales to 5.8% from
4.2%. The increase in depreciation and amortization resulted primarily from
capital expenditures for a new point-of-sale system, new store construction, the
renovation of existing stores, and the acquisition of El Portal and Bentley's.

         Net interest expense was $2.1 million for the second quarter of 2001 as
compared to $0.5 million during the same period last year. The increase was due
to the acquisition of El Portal and Bentley's.

         During the first quarter last year, the Company repurchased $13.3
million of its 11-1/4% senior notes, which are due 2004. As a result of the
repurchase last year, the Company incurred an extraordinary loss, net of tax of
$0.4 million, of approximately $0.6 million for the early extinguishment of
debt.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED AUGUST 4, 2001 COMPARED TO THE
SIX MONTHS ENDED JULY 29, 2000

         Net sales increased 44.1% to $211.6 million in 2001 from $146.9 million
in 2000. Contributing to the $64.7 million sales increase were: (i) an $2.3
million decrease associated with a 1.8% comparable store sales decrease, and
(ii) a $67 million increase in non-comparable store sales due to new stores that
have been open less than one year and the acquisition of El Portal and
Bentley's.

         Wilsons Leather opened 51 stores, acquired 106 stores with the
acquisition of Bentley's and closed 17 stores in the six months ended August 4,
2001 compared to opening 24 stores and closing six stores in the same period
last year. Included in the 51 stores opened in the first half of 2001 are 17
mall, 25 outlet, 7 airport and 2 travel stores. As of August 4, 2001, Wilsons
Leather operated 751 stores compared to 547 stores at July 29, 2000.

         Cost of goods sold, buying and occupancy costs were 78.4% of net sales,
or $165.9 million, compared to 74.8% of net sales, or $109.8 million, for the
same period a year ago. Gross margin net of buying and occupancy costs declined
3.6% as a percentage of net sales compared to last year due primarily to
decreased sales of higher margin fashion merchandise and higher markdowns as a
result of higher levels of clearance merchandise. The difference in inventories
between LIFO and FIFO was not material as of August 4, 2001 and July 29, 2000.

         Selling, general and administrative expenses were 36.5% of net sales,
or $77.2 million, compared to 40.6% of net sales, or $59.6 million, for the same
period last year. The decrease is due to cost savings initiatives implemented in
the second quarter of the current year, as well as beginning to capitalize on
methods to leverage the integrated global recovery network within the travel
stores.

         Depreciation and amortization expense increased to $9.8 million from
$4.4 million in the same period last year. The increase resulted primarily from
capital expenditures for a new point-of-sale system, new store construction, the
renovation of existing stores, and the acquisition of El Portal and Bentley's.

                                       12
<PAGE>

         Net interest expense increased $2.9 million from the same period last
year. The increase is primarily the result of the El Portal and Bentley's
acquisitions which were funded with cash from working capital and the Company's
senior credit facility.

         The Company repurchased $13.3 million of its 11-1/4% senior notes which
are due 2004 during fiscal 2000. The Company incurred an extraordinary loss, net
of tax of $0.4 million, of approximately $0.6 million for the early
extinguishment of debt.

LIQUIDITY AND CAPITAL RESOURCES

         Wilsons Leather's capital requirements are primarily driven by the
Company's seasonal working capital needs and its strategy to open new stores,
remodel existing stores and upgrade information systems. During the second
quarter of 2001 the Company opened 20 stores net of closings. The Company
anticipates it will open approximately 38 additional stores, net of closings, by
the end of the fiscal year. The Company's peak working capital needs typically
occur during the period from August through early December as inventory levels
are increased in advance of the Company's peak selling season from October
through December.

         General Electric Capital Corporation and a syndicate of banks provide
the Company with a senior credit facility, which was most recently amended on
June 19, 2001. The senior credit facility provides for borrowings of up to $215
million in aggregate principal amount, which includes a term loan of $25.0
million and a letter of credit subfacility of $85.0 million. The maximum amount
available under the senior credit facility is limited to 60% of net inventories
(which increases to 65% during the months of July and October and 70% during the
months of August and September for inventories of the type that Wilsons sold
before the acquisitions of El Portal Group and Bentley's plus a $15.0 million
seasonal advance) less outstanding letters of credit.

         Interest is payable on borrowings at one or more variable rates
determined by LIBOR plus 1.75%, commercial paper rate plus 1.75% or the "prime"
rate plus 0.5%. The spreads are subject to change based on the financial results
and will be decreased by 0.5% on June 19, 2002. Interest is payable on the term
loan at the prime rate plus 4%. Wilsons Leather pays 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. The senior credit facility expires in
May 2004. The senior credit facility contains certain covenants limiting, among
other things, the Company's ability to make capital expenditures, pay cash
dividends or make other distributions.

         The Company plans to use the senior credit facility for its immediate
and future working capital needs, including capital expenditures. For 2000, the
peak borrowings and letters of credit outstanding under the senior credit
facility were $128.8 million and $57.2 million, respectively. The peak time of
year is October through December for borrowings and August through September for
letters of credit. The Company is dependent on the senior credit facility to
fund working capital and letter of credit needs. We are also currently
evaluating opportunuties to access the capital markets to replenish working
capital depleted in previous acquisitions, as well as finance our other capital
needs.

         On February 3, 2001, the Company had $30.6 million of 11-1/4% senior
notes outstanding. As of August 4, 2001, the Company had not reduced this
outstanding balance. The indenture governing the 11-1/4% senior notes contains
numerous operating covenants that limit the discretion of management with
respect to certain business matters and place significant restrictions on, among

                                       13
<PAGE>

other things, our ability to incur additional indebtedness, to create liens or
other encumbrances, to declare or pay any dividends, to make certain payments or
investments, loans and guarantees and to sell or otherwise dispose of assets and
merge or consolidate with another entity.

         We entered into a $40.0 million interest rate swap transaction on July
7, 1999 with First Union whereby First Union pays the Company interest at a
fixed rate of 11.25% and the Company pays First Union interest at a commercial
paper rate plus 5.37% (9.04% at August 4, 2001). The agreement terminated on
August 15, 2001. As of August 4, 2001 the transaction had not had a material
impact on the Company's financial position or results of operations.

CASH FLOW ANALYSIS

         Operating activities for the six months ended August 4, 2001, resulted
in cash used of $106.4 million compared to cash used of $94.0 million in the
corresponding period of 2000. The cash used was primarily the result of the
seasonal changes in the Company's current assets and liabilities. The increase
in cash used compared to last year is due primarily to decreases in accounts
payable and accrued expense, and income taxes payable offset by a smaller
increase in inventory.

         Changes in certain balance sheet accounts between February 3, 2001, and
August 4, 2001, reflect normal seasonal variations within the retail industry.
The level of cash and cash equivalents, inventories, accounts receivable,
accounts payable and certain accrued liabilities fluctuate due to the seasonal
nature of the working capital needs of the Company's operations.

         Investing activities for the six months ended August 4, 2001 totaled
$55.3 million and were primarily comprised of capital expenditures for the
renovations of and improvements to existing stores, construction of new stores,
and the acquisition of Bentley's. Investing activities for the six months ended
July 29, 2000 totaled $13.4 million and were primarily comprised of capital
expenditures for a new point-of-sale system, the renovation of and improvements
to existing stores and construction of new stores.

         Financing activities for the six months ended August 4, 2001 provided
net cash of $113.2 million, mainly for the acquisition of Bentley's. For the six
months ended July 29, 2000, $13.0 million of net cash was used, primarily for
the repurchase 11-1/4% senior notes.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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

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

         At August 4, 2001, Wilsons Leather had cash and cash equivalents
totaling $3.6 million. The effect of a 100 basis point change in interest rates
would have an estimated $.2 million pre-tax earnings and cash flow impact,
assuming other variables are held constant.

                                       14
<PAGE>

         The Company's senior credit facility carries interest rate risk that is
generally related to either LIBOR, commercial paper rate or the prime rate. If
any of those rates were to change while Wilsons Leather was borrowing under the
facility, interest expense would increase or decrease accordingly. As of August
4, 2001, there were $86.2 million in borrowings under the senior credit facility
and $37.2 million in outstanding letters of credit.

         The Company has no earnings or cash flow exposure due to market risks
on its long-term debt obligations as a result of the fixed-rate nature of the
debt. However, interest rate changes would affect the fair market value of the
debt. At August 4, 2001, Wilsons Leather had fixed rate debt of $30.6 million
maturing in August 2004, and $25.0 million maturing in May 2004.

         The Company entered into a $40.0 million interest rate swap transaction
whereby First Union pays the Company interest at a fixed rate of 11.25%, and the
Company pays First Union interest at a commercial paper rate plus 5.37% (9.04%
at August 4, 2001). The agreement terminated on August 15, 2001.


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

         Except for historical information, matters discussed in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements involve risks and uncertainties, and actual results
may be materially different. Because actual results may differ, readers are
cautioned not to place undue reliance on forward-looking statements. Factors
that could cause actual results to differ include: economic downturns; risks
associated with future growth; risks associated with acquisitions; change in
consumer preferences and fashion trends away from leather; seasonality of the
business; risks associated with foreign sourcing and international business;
disruptions in product supplies to our travel stores; decreased availability and
increased cost of leather; changes in customer shopping patterns, competition in
our markets; loss of key members of our management team; risks associated with
our debt service; reliance on third parties for maintaining our management
information systems; concentration of our common stock; and volatility of the
Company common stock. Certain of these risk factors are more fully discussed in
the Company's Annual Report on Form 10-K for the fiscal year ended February 3,
2001.

                                       15
<PAGE>

PART II - OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES

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

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         At the Company's 2001 Annual Meeting of Shareholders held on June 6,
2001, the shareholders approved the following:

(a)      The election of directors.  Each nominated director was elected as
         follows:

         Director-Nominee          Votes For                 Votes Withheld
         ----------------          ---------                 --------------

         Lyle Berman               12,759,816.798               1,802,684
         Thomas J. Brosig          14,446,477.798                 116,023
         Gary L. Crittenden        12,759,816.798               1,802,684
         Morris Goldfarb           14,446,477.798                 116,023
         Marvin Goldstein          14,466,477.798                 116,023
         David L. Rogers           13,896,917.798                 665,583
         Joel N. Waller            13,896,917.798                 665,583

(b)      Ratification of the appointment of Arthur Andersen LLP as the
         independent public accountants of the Company for the fiscal year
         ending February 2, 2002.

         The proposal received 14,509,221.582 votes for and 52,220 votes
         against. There were 1,059.216 abstentions and 0 broker non-votes.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         A.       Exhibits

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

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

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

                  4.1      Specimen of Common Stock Certificate.

                                       16
<PAGE>

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

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

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

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

                  10.1     Third Amended and Restated Credit Agreement dated as
                           of June 19, 2001 among Wilsons Leather Holdings Inc.,
                           as Borrower, the Lenders signatory thereto from time
                           to time, as Lenders, General Electric Capital
                           Corporation as Agent, Lender, Term Lender and Swing
                           Line Lender, GECC Capital Markets Group, Inc. as Lead
                           Arranger, Fleet National Bank, as Lender and
                           Documentation Agent and First Union National Bank, as
                           Lender and Syndication Agent.

                  10.2     Amended and Restated Security Agreement dated as of
                           June 19, 2001 between Wilsons Leather Holdings Inc.
                           and other Grantors listed on the signature pages
                           thereto, in favor of General Electric Capital
                           Corporation in its capacity as Agent for Lenders.

                  10.3     Reaffirmation of Guaranty dated as of June 19, 2001
                           by Wilsons The Leather Experts, Inc., Wilsons Center,
                           Inc., Rosedale Wilsons Inc., River Hills Wilsons,
                           Inc. and the Store Guarantors listed on the signature
                           pages thereto in favor of General Electric Capital
                           Corporation as Agent for Lenders.

                                       17
<PAGE>

                  10.4     Mortgage, Security Agreement, Assignment of Leases
                           and Rents and Financing Statement dated as of June
                           19, 2001 by Bermans The Leather Experts Inc. in favor
                           of General Electric Capital Corporation as Agent for
                           Lenders.

                  10.5     Mortgage, Security Agreement, Assignment of Leases
                           and Rents, Financing Statement and Fixture Filing
                           dated as of June 19, 2001 by Bentley's Luggage Corp.
                           in favor of General Electric Capital Corporation as
                           Agent for Lenders.

         B.       Exhibits and Reports on Form 8-K: The Company filed one report
                  on Form 8-K during the second quarter ended August 4, 2001, as
                  follows:

                  Form 8-K filed June 25, 2001, announcing the amendment of the
                  senior credit facility with General Electric Capital
                  Corporation and a syndicate of banks and filing as exhibits
                  the Third Amended and Restated Credit Agreement dated as of
                  June 19, 2001, the Amended and Restated Agreement as of June
                  19, 2001, the Reaffirmation of Guaranty dated as of June 19,
                  2001, the Mortgage, Security Agreement, Assignment of Leases
                  and Rents, Financing Statement and Fixture Filing dated as of
                  June 19, 2001 by Berman's The Leather Experts Inc. in favor of
                  General Electric Capital Corporation as Agent for Lenders, and
                  the Mortgage, Security Agreement, Assignment of Leases and
                  Rents, Financing Statement and Fixture Filing dated as of June
                  19, 2001 by Bentley's Luggage Corp. in favor of General
                  Electric Capital Corporation as Agent for Lenders.

                                       18
<PAGE>

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



WILSONS THE LEATHER EXPERTS INC.


By: /s/ Peter G. Michielutti
    ----------------------------------
         Peter G. Michielutti
         Senior Vice President and
         Chief Financial Officer


Date:    September 18, 2001

                                       19
<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

Exhibit No.  Description                                                     Method of Filing
-----------  -----------                                                     ----------------

<S>          <C>                                                             <C>
3.1          Amended and Restated  Articles of  Incorporation  of Wilsons
             The Leather  Experts Inc.  adopted June 16, 1998, as amended
             by the Articles of Amendment dated February 17, 2000. (1).....  Incorporated by Reference

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

4.1          Specimen of Common Stock Certificate. (2).....................  Incorporated by Reference

4.2          Indenture dated as of August 18, 1997 by and among Wilsons The
             Leather Experts Inc., the other corporations listed on the
             signature pages thereof, and 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 Reference

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

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

4.5          Amendment to Registration Rights Agreement dated as of
             August 12, 1999 by and among Wilsons The Leather Experts
             Inc. and the Shareholders listed on the attachments
             thereto. (6)..................................................  Incorporated by Reference

10.1         Third Amended and Restated Credit Agreement dated as of
             June 19, 2001 among Wilsons Leather Holdings Inc., as
             Borrower, the Lenders signatory thereto from time to time,
             as Lenders, General Electric Corporation, as Agent, Lender,
             Term
</TABLE>

                                       20
<PAGE>

<TABLE>
<CAPTION>

<S>          <C>                                                             <C>
             Lender and Swing Line Lender, GECC Capital Markets
             Group, Inc. as Lead Arranger, Fleet National Bank, as
             Lender and Documentation Agent and First Union National
             Bank, as Lender and Syndication Agent. (7)....................  Incorporated by Reference

10.2          Amended and Restated Security Agreement dated as of June
             19, 2001 between Wilsons Leather Holdings Inc. and other
             Grantors listed on the signature pages thereto, in favor of
             General Electric Capital Corporation in its capacity as
             Agent for Lenders. (7)........................................  Incorporated by Reference

10.3         Reaffirmation of Guaranty dated as of June 19, 2001 by
             Wilsons The Leather Experts, Inc., Wilsons Center, Inc.,
             Rosedale Wilsons Inc., River Hills Wilsons, Inc. and the
             Store Guarantors listed on the signature pages thereto in
             favor of General Electric Capital Corporation as Agent for
             Lenders. (7)..................................................  Incorporated by Reference

10.4         Mortgage, Security Agreement, Assignment of Leases and
             Rents and Financing Statements dated as of June 19, 2001 by
             Bermans The Leather Experts Inc. in favor of General
             Electric Capital Corporation as Agent for Lenders. (7)........  Incorporated by Reference

10.5         Mortgage, Security Agreement, Assignment of Leases and
             Rents, Financing Statement and Fixture Filing dated as of
             June 19, 2001 by Bentley's Luggage Corp. in favor of
             General Electric Capital Corporation as Agent for
             Lenders. (7)..................................................  Incorporated by Reference
</TABLE>

(1)      Incorporated by reference to the same numbered exhibit to the Company's
         Report on Form 10-K for the fiscal year ended January 29, 2000 filed
         with the Commission (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 (File No. 0-21543).

(4)      Incorporated by reference to Exhibit 10.4 to the Company's Report on
         Form 10-Q for the quarter ended August 2, 1997 filed with the
         Commission (File No. 0-21543).

                                       21
<PAGE>

(5)      Incorporated by reference to Exhibit 4.8 to the Company's Registration
         Statement on Form S-1 (333-13967) filed with the Commission on October
         11, 1996.

(6)      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).

(7)      Incorporated by reference to the same numbered exhibit to the Company's
         Report on Form 8-K filed with the Commission on June 25, 2001 (File No.
         0-21543).

                                       22
[{"type": "10-Q", "sequence": "1", "filename": "d10q.txt", "description": "FORM 10-Q", "secsgml_size_bytes": 62017}]
{"company-data": {"conformed-name": "WILSONS THE LEATHER EXPERTS INC", "cik": "0001016607", "assigned-sic": "5651", "irs-number": "411839933", "state-of-incorporation": "MN", "fiscal-year-end": "0201"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "333-13967", "film-number": "1739907"}, "business-address": {"street1": "7401 BOONE AVENUE NORTH", "street2": "ST LOUIS PARK", "city": "BROOKLYN PARK", "state": "MN", "zip": "55428", "phone": "6123914000"}}
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 August 4, 2001

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

        For the transition period from _______________ to _______________

                        Commission file number 000-21543

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.                     Yes [X]    No [ ]

As of September 3, 2001, there were 17,262,205 shares of common stock, $0.01 par
value per share, outstanding.

                                       1
WILSONS THE LEATHER EXPERTS INC.
                                     INDEX

                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

     Item 1.  Consolidated Financial Statements

              Consolidated Balance Sheets as of August 4, 2001,
              February 3, 2001 and July 29, 2000                               3

              Consolidated Statements of Operations for the
              three months ended August 4, 2001 and July 29, 2000              4

              Consolidated Statements of Operations for the
              six months ended August 4, 2001 and July 29, 2000                5

              Consolidated Statements of Cash Flows for the
              six months ended August 4, 2001 and July 29, 2000                6

              Notes to Consolidated Financial Statements                       7

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

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk      14

PART II - OTHER INFORMATION

     Item 2.  Changes in Securities                                           16

     Item 4.  Submission of Matters to a Vote of Security Holders             16

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

     Signature                                                                19

     Index to Exhibits                                                        20

                                       2
WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
AUGUST 4,   FEBRUARY 3    JULY 29,
             ASSETS                                        2001         2001 *       2000
             ------                                      ---------    ---------   ---------
                                                        (Unaudited)              (Unaudited)
CURRENT ASSETS:
   Cash and cash equivalents                             $   3,646    $  52,122   $   4,586
   Accounts receivable, net                                 15,339       11,640      10,069
   Inventories                                             183,687      129,412     125,249
   Prepaid expenses and other current assets                 6,880       11,622       6,411
                                                         ---------    ---------   ---------
       Total current assets                                209,552      204,796     146,315

PROPERTY AND EQUIPMENT, net                                107,583       82,428      58,572
OTHER ASSETS, net                                           41,465       28,615       1,565
                                                         ---------    ---------   ---------
       Total assets                                      $ 358,600    $ 315,839   $ 206,452
                                                         =========    =========   =========

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

CURRENT LIABILITIES:
   Accounts payable                                      $  23,120    $  17,803   $  18,799
   Notes payable                                            86,200           --          --
   Accrued expenses                                         31,616       45,999      32,781
   Income taxes payable                                      2,723       38,025       4,625
   Deferred income taxes                                     2,776        2,305          --
                                                         ---------    ---------   ---------
       Total current liabilities                           146,435      104,132      56,205

LONG-TERM DEBT                                              55,590       30,590      30,590
OTHER LONG-TERM LIABILITIES                                  3,346        4,934       3,670
                                                         ---------    ---------   ---------
       Total liabilities                                   205,371      139,656      90,465
                                                         ---------    ---------   ---------

COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
   Common stock, $.01 par value; 150,000,000 shares
     authorized, 17,251,647, 16,885,750 and 16,745,917
     shares issued and outstanding on August 4, 2001,
   February 3, 2001 and July 29, 2000, respectively            173          169         167
   Additional paid-in capital                               65,452       60,495      59,000
   Retained earnings                                        89,015      115,490      56,803
   Unearned compensation                                    (1,439)          --          --
   Cumulative other comprehensive income                        28           29          17
                                                         ---------    ---------   ---------
       Total shareholders' equity                          153,229      176,183     115,987
                                                         ---------    ---------   ---------
       Total liabilities and shareholders' equity        $ 358,600    $ 315,839   $ 206,452
                                                         =========    =========   =========
The accompanying notes are an integral part of these
                       consolidated financial statements.

           * - Derived from audited consolidated financial statements.

                                       3
WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

                                                            THREE MONTHS ENDED
                                                          ---------------------
                                                          AUGUST 4,     JULY 29,
                                                            2001         2000
                                                          --------     --------

NET SALES                                                 $ 94,165     $ 56,551
     COST OF GOODS SOLD, BUYING AND
          OCCUPANCY COSTS                                   84,039       49,633
                                                          --------     --------
         Gross Margin                                       10,126        6,918

     SELLING, GENERAL AND
          ADMINISTRATIVE EXPENSES                           40,556       29,708
     DEPRECIATION AND AMORTIZATION                           5,460        2,393
                                                          --------     --------
         Loss from operations                              (35,890)     (25,183)
     INTEREST EXPENSE, net                                   2,103          488
                                                          --------     --------
         Loss before income taxes                          (37,993)     (25,671)
     INCOME TAX BENEFIT                                    (15,197)     (10,269)
                                                          --------     --------
         Net loss                                         $(22,796)    $(15,402)
                                                          ========     ========

NET LOSS PER COMMON SHARE -
     BASIC AND DILUTED
     Net loss per common share - basic and diluted        $  (1.32)    $  (0.92)
                                                          ========     ========

Weighted average common shares
    outstanding - basic and diluted                         17,210       16,717
                                                          ========     ========

                                       4
WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

                                                             SIX MONTHS ENDED
                                                         ----------------------
                                                          AUGUST 4,     JULY 29,
                                                            2001         2000
                                                         ---------    ---------

NET SALES                                                $ 211,642    $ 146,859
     COST OF GOODS SOLD, BUYING AND
          OCCUPANCY COSTS                                  165,867      109,827
                                                         ---------    ---------
        Gross Margin                                        45,775       37,032

     SELLING, GENERAL AND ADMINISTRATIVE
          EXPENSES                                          77,240       59,554
     DEPRECIATION AND AMORTIZATION                           9,793        4,396
                                                         ---------    ---------
         Loss from operations                              (41,258)     (26,918)
     INTEREST EXPENSE, net                                   2,865           11
                                                         ---------    ---------
         Loss before income taxes                          (44,123)     (26,929)
     INCOME TAX BENEFIT                                    (17,649)     (10,772)
                                                         ---------    ---------
         Loss before extraordinary item                    (26,474)     (16,157)
     EXTRAORDINARY LOSS ON EARLY
          EXTINGUISHMENT OF DEBT, net of tax of $410            --         (623)
                                                         ---------    ---------

         Net loss                                        $ (26,474)   $ (16,780)
                                                         =========    =========

NET LOSS PER COMMON SHARE -
     BASIC AND DILUTED:
     Loss before extraordinary item                      $   (1.55)   $   (0.97)
     Extraordinary loss on early extinguishment
         of debt, net of tax                                    --        (0.04)
                                                         ---------    ---------
     Net loss per common share - basic and diluted       $   (1.55)   $   (1.01)
                                                         =========    =========

Weighted average common shares
    outstanding - basic and diluted                         17,092       16,687
                                                         =========    =========

                                       5
WILSONS THE LEATHER EXPERTS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
SIX MONTHS ENDED
                                                                ----------------------
                                                                 AUGUST 4,    JULY 29,
                                                                   2001         2000
                                                                ---------    ---------
OPERATING ACTIVITIES:
    Net loss                                                    $ (26,474)   $ (16,780)
    Adjustments to reconcile net loss to net cash used in
      operating activities-
      Extraordinary loss on early extinguishment of debt               --          623
      Depreciation and amortization                                 9,793        4,396
      Amortization of deferred financing costs                        314          207
      Loss (gain) on disposal of assets                               250          (72)
      Restricted stock compensation expense                           131           --
      Deferred income taxes                                         2,936       (1,156)
      Changes in operating assets and liabilities:
          Accounts receivable, net                                 (2,269)      (2,522)
          Inventories                                             (36,981)     (46,028)
          Prepaid expenses                                          3,074        4,022
          Accounts payable and accrued expenses                   (22,770)      (6,981)
          Income taxes payable and other liabilities              (34,388)     (29,729)
                                                                ---------    ---------
              Net cash used in operating activities              (106,384)     (94,020)
                                                                ---------    ---------

INVESTING ACTIVITIES:
      Additions to property and equipment                         (21,873)     (13,361)
      Acquisitions                                                (33,452)          --
                                                                ---------    ---------
          Net cash used in investing activities                   (55,325)     (13,361)
                                                                ---------    ---------

FINANCING ACTIVITIES:
      Proceeds from issuance of common stock, net                   2,027          989
      Change in notes payable                                      86,200           --
      Repayment of long-term debt                                  25,000      (13,300)
      Other Financing                                                   6         (648)
                                                                ---------    ---------
          Net cash provided by (used in) financing activities     113,233      (12,959)
                                                                ---------    ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS                         (48,476)    (120,340)
CASH AND CASH EQUIVALENTS, beginning of period                     52,122      124,926
                                                                ---------    ---------
CASH AND CASH EQUIVALENTS, end of period                        $   3,646    $   4,586
                                                                =========    =========

SUPPLEMENTAL CASH FLOW INFORMATION:

      Cash paid during the period for-
          Interest                                              $   4,261    $   2,771
                                                                =========    =========
          Income taxes                                          $  14,362    $  19,660
                                                                =========    =========
The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       6
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, apparel and travel products in the United States. As of
August 4, 2001, the Company operated 751 retail stores located in 46 states, the
District of Columbia, Guam, Puerto Rico, Canada and the United Kingdom,
including 479 mall stores, 91 outlet stores and 37 airport locations under the
Wilsons Leather format and 144 premium travel products and accessories stores
under the travel store format. The Company supplemented permanent mall stores
with 239 seasonal stores during its peak selling season from October through
December during the year ended February 3, 2001.

2.       BASIS OF FINANCIAL STATEMENT PRESENTATION

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

         The accompanying unaudited financial statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosure, normally included in
financial statements prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules and
regulations. Although management believes that the accompanying disclosures are
adequate to make the information presented not misleading, it is recommended
that these interim financial statements be read in conjunction with the
Company's most recent audited financial statements and related notes included in
its 2000 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
February 2, 2002.

3.       INVENTORIES

         Inventories, principally finished goods, consist of merchandise
purchased from domestic and foreign vendors and are carried at the lower of cost
or market value, determined by the retail inventory method on the last-in,
first-out (LIFO) basis. Quarterly inventory determinations under LIFO are
partially based on assumptions as to inventory levels at the end of the fiscal
year, sales and the projected rate of inflation for the year. The difference in
inventories between LIFO and the first-in, first-out method (FIFO) was not
material as of August 4, 2001.

                                       7
4.       EXTRAORDINARY LOSS

         The Company repurchased $13.3 million of its 11-1/4% senior notes,
which are due 2004, in the previous fiscal year. The Company incurred an
extraordinary loss, net of tax, of approximately $0.6 million for the early
extinguishment of debt.

5.       NET LOSS PER SHARE

         Basic loss per share is computed by dividing the net loss available to
common shareholders by the weighted average number of common shares outstanding
during the period. Diluted loss per share is computed using the treasury stock
method and is calculated to compute the dilutive effect of potential common
shares. A reconciliation of these amounts is as follows:
Three Months       Three Months     Six Months       Six Months
                                         Ended             Ended           Ended            Ended
                                    August 4, 2001     July 29, 2000   August 4, 2001   July 29, 2000
                                    --------------     -------------   --------------   -------------
Net loss                                $(22,796)        $(15,402)        $(26,474)        $(16,780)
                                        ========         ========         ========         ========

Weighted average common shares
  outstanding - basic                     17,210           16,717           17,092           16,687
Dilutive potential common shares              --               --               --               --
                                        --------         --------         --------         --------

Weighted average common shares
  outstanding - basic and
  diluted                                 17,210           16,717           17,092           16,687
                                        ========         ========         ========         ========

Basic and diluted net loss per
  common share                          $  (1.32)        $  (0.92)        $  (1.55)        $  (1.01)
                                        ========         ========         ========         ========
6.       ACQUISITIONS

         On October 31, 2000, the Company acquired all of the outstanding common
shares of El Portal Group, Inc. (El Portal), a specialty retailer of premium
travel products and accessories, for approximately $15.4 million excluding
assumed debt of approximately $13.8 million. The acquisition was funded with
cash from working capital and the Company's senior credit facility (as herein
defined). On April 13, 2001, the Company acquired all of the outstanding shares
of Bentley's Luggage Corp. (Bentley's), a specialty retailer of travel products
and accessories, for approximately $34.0 million, subject to certain
post-closing adjustments. The acquisition was funded with cash from working
capital and the Company's senior credit facility. The Company accounted for both
acquisitions under the purchase method of accounting. Accordingly, the purchase
prices were allocated to the assets acquired and liabilities assumed based on
their estimated fair market values at the date of acquisition. Certain of the
liabilities assumed have been recorded based upon preliminary estimates as of
the date of the acquisitions. The excess of the

                                       8
purchase prices over the fair market value of the net assets acquired was
allocated to goodwill and other intangibles. Results of operations of El Portal
and Bentley's have been included in the accompanying consolidated financial
statements since the date of acquisition.

         The following unaudited pro forma information presents the results of
operations as if the acquisitions had been completed as of January 30, 2000 (in
thousands, except per share amounts):
Six Months Ended    Six Months Ended
                                                      August 4, 2001      July 29, 2000
                                                     ----------------    ----------------
Revenue                                           $229,891           $217,007
         Net loss before extraordinary item                (28,859)           (16,215)
         Net loss                                          (28,859)           (16,838)

         Net loss before extraordinary item per
              common share - basic and diluted               (1.69)              (.97)
         Net loss per common share - basic and diluted       (1.69)             (1.01)

         Weighted average common shares
              outstanding - basic and diluted                17,092             16,687
The unaudited pro forma consolidated financial information does not
purport to represent what the Company's financial position or results of
operations would actually have been if these transactions had occurred at such
dates or project the Company's future results of operations.

7.       OTHER COMPREHENSIVE INCOME

         The Company reports cumulative other comprehensive income as a separate
item in the shareholders' equity section of the balance sheet. Other
comprehensive income consists of foreign currency translation adjustments. For
the quarter ending August 4, 2001, there was other comprehensive income of
$28,000. For the quarter ending July 29, 2000, there was other comprehensive
income of $17,000.

8.       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT

         Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities," as amended, became effective
for the years beginning after June 15, 2000. SFAS No. 133 establishes accounting
and reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allows a derivative's gains or losses to offset related
results on the hedged item in the income statement and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. The Company's only derivative instrument was an
interest rate swap with First Union National Bank (First Union), which
terminated on August 15, 2001. The

                                       9
Company adopted SFAS No. 133 on February 4, 2001 and this adoption did not have
a material effect on the Company's financial position or results of operations
or other comprehensive income.

         On June 29, 2001, the FASB approved for issuance SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Intangible Assets."
Major provisions of these Statements are as follows: all business combinations
initiated after June 30, 2001 must use the purchase method of accounting; the
pooling of interest method of accounting is prohibited except for transactions
initiated before July 1, 2001; intangible assets acquired in a business
combination must be recorded separately from goodwill if they arise from
contractual or other legal rights or are separable from the acquired entity and
can be sold, transferred, licensed, rented or exchanged, either individually or
as part of a related contract, asset or liability; goodwill and intangible
assets with indefinite lives are not amortized, but are tested for impairment
annually, except in certain circumstances, and whenever there is an impairment
indicator; all acquired goodwill must be assigned to reporting units for
purposes of impairment testing and segment reporting; effective January 2, 2002,
goodwill will no longer be subject to amortization. Management is currently
reviewing the provisions of these Statements and their impact on the Company's
results of operations.

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

         The following discussion of the financial condition and results of
operations of Wilsons The Leather Experts Inc. and its wholly owned subsidiaries
(Wilsons Leather or the Company) should be read in conjunction with the
Company's most recent audited financial statements and related notes included in
its 2000 Annual Report on Form 10-K.

OVERVIEW

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

         At August 4, 2001, we operated a total of 751 stores located in 46
states, the District of Columbia, Guam, Puerto Rico, Canada and the United
Kingdom. Our Wilsons Leather concept included 479 mall stores, 91 outlet stores
and 37 airport locations. Each year we supplement our permanent stores with
temporary holiday stores during our peak holiday season, which totaled 239 in
2000. Our Wilsons Leather mall stores average approximately 2,100 square feet
and feature a large assortment of both classic and fashion-forward leather
outerwear, apparel and accessories priced as an excellent value to our
customers. Our outlet stores are operated primarily under the Wilsons Leather
Outlet name, average approximately 2,400 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
600 square feet, feature travel products as well as leather accessories, and
provide us the opportunity to showcase our products and the

                                       10
Wilsons Leather brand to millions of potential customers each year in some of
the world's busiest airports. Our proprietary labels, including M. Julian(R),
Maxima(R), Pelle Studio(R) and Wilsons Leather(TM), are positioned to appeal to
identified customer lifestyle segments.

         Through our recent acquisitions of Bentley's and El Portal, we created
the leading specialty retail chain of travel products and accessories in the
United States. At August 4, 2001, we operated 39 premium travel products and
accessories stores under the El Portal and California Luggage Outlet names in 5
states and Guam and 105 Bentley's stores in 22 states and Puerto Rico. Our
travel stores average approximately 2,700 square feet and feature premium
nationally-branded merchandise, including Tumi(TM), Hartmann(TM), Swiss
Army(TM), Travlepro(R) and Kenneth Cole(R).

         Wilsons House of Suede, Inc., one of the predecessor companies, was
founded in the late 1940s and was acquired by CVS New York, Inc. (CVS) in 1982.
Following this acquisition, CVS acquired both Berman's The Leather Experts, Inc.
in 1988 and Georgetown Leather Design in 1993 to become a leading specialty
retailer of leather apparel and accessories with over 500 stores nationally. In
May 1996, members of our current management participated in a management buyout
from CVS.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 4, 2001 COMPARED TO THE
THREE MONTHS ENDED JULY 29, 2000

         Net sales increased 66.5% to $94.2 million in 2001 from $56.6 million
in 2000. Contributing to the $37.6 million sales increase were (i) a $4.0
million, or 7.6%, comparable store sales decrease, and (ii) a $41.6 million
increase in non-comparable store sales due to stores that have been open less
than one year and the acquisition of El Portal and Bentley's.

         Wilsons Leather opened 28 stores and closed 8 stores in the second
quarter ended August 4, 2001 compared to opening 15 stores and closing 4 stores
during the second quarter last year. Included in the 28 stores opened in the
second quarter of 2001 are 8 mall, 15 outlet, 3 airport and 2 travel stores. As
of August 4, 2001, Wilsons Leather operated 751 stores compared to 547 stores at
July 29, 2000.

         Cost of goods sold, buying and occupancy costs for the second quarter
of 2001 were 89.3% of net sales, or $84.0 million, compared to 87.8% of sales,
or $49.6 million, for the same period a year ago. The increase of 1.5 points as
a percentage of net sales is related to a decrease in gross margin net of
occupancy and buying costs. Gross margin net of occupancy and buying costs
decreased for the quarter as compared to last year due primarily to decreased
sales of higher margin fashion merchandise and higher markdowns as a result of
higher levels of clearance merchandise at the beginning of the quarter offset by
slightly higher margin sales in the travel-related business. The Company's
inventories are valued under the retail inventory method on the LIFO basis. The
difference in inventories between LIFO and the FIFO method was not material as
of August 4, 2001 and July 29, 2000.

         Selling, general and administrative expenses for the second quarter of
2001 were 43.1% of net sales, or $40.6 million, compared to 52.5% of net sales,
or $29.7 million, for the same period last year. The decrease as a percentage of
sales was due mainly to cost savings initiatives implemented in the second
quarter.

                                       11
Depreciation and amortization expense increased to $5.5 million from
$2.4 million last year, and increased as a percentage of net sales to 5.8% from
4.2%. The increase in depreciation and amortization resulted primarily from
capital expenditures for a new point-of-sale system, new store construction, the
renovation of existing stores, and the acquisition of El Portal and Bentley's.

         Net interest expense was $2.1 million for the second quarter of 2001 as
compared to $0.5 million during the same period last year. The increase was due
to the acquisition of El Portal and Bentley's.

         During the first quarter last year, the Company repurchased $13.3
million of its 11-1/4% senior notes, which are due 2004. As a result of the
repurchase last year, the Company incurred an extraordinary loss, net of tax of
$0.4 million, of approximately $0.6 million for the early extinguishment of
debt.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED AUGUST 4, 2001 COMPARED TO THE
SIX MONTHS ENDED JULY 29, 2000

         Net sales increased 44.1% to $211.6 million in 2001 from $146.9 million
in 2000. Contributing to the $64.7 million sales increase were: (i) an $2.3
million decrease associated with a 1.8% comparable store sales decrease, and
(ii) a $67 million increase in non-comparable store sales due to new stores that
have been open less than one year and the acquisition of El Portal and
Bentley's.

         Wilsons Leather opened 51 stores, acquired 106 stores with the
acquisition of Bentley's and closed 17 stores in the six months ended August 4,
2001 compared to opening 24 stores and closing six stores in the same period
last year. Included in the 51 stores opened in the first half of 2001 are 17
mall, 25 outlet, 7 airport and 2 travel stores. As of August 4, 2001, Wilsons
Leather operated 751 stores compared to 547 stores at July 29, 2000.

         Cost of goods sold, buying and occupancy costs were 78.4% of net sales,
or $165.9 million, compared to 74.8% of net sales, or $109.8 million, for the
same period a year ago. Gross margin net of buying and occupancy costs declined
3.6% as a percentage of net sales compared to last year due primarily to
decreased sales of higher margin fashion merchandise and higher markdowns as a
result of higher levels of clearance merchandise. The difference in inventories
between LIFO and FIFO was not material as of August 4, 2001 and July 29, 2000.

         Selling, general and administrative expenses were 36.5% of net sales,
or $77.2 million, compared to 40.6% of net sales, or $59.6 million, for the same
period last year. The decrease is due to cost savings initiatives implemented in
the second quarter of the current year, as well as beginning to capitalize on
methods to leverage the integrated global recovery network within the travel
stores.

         Depreciation and amortization expense increased to $9.8 million from
$4.4 million in the same period last year. The increase resulted primarily from
capital expenditures for a new point-of-sale system, new store construction, the
renovation of existing stores, and the acquisition of El Portal and Bentley's.

                                       12
Net interest expense increased $2.9 million from the same period last
year. The increase is primarily the result of the El Portal and Bentley's
acquisitions which were funded with cash from working capital and the Company's
senior credit facility.

         The Company repurchased $13.3 million of its 11-1/4% senior notes which
are due 2004 during fiscal 2000. The Company incurred an extraordinary loss, net
of tax of $0.4 million, of approximately $0.6 million for the early
extinguishment of debt.

LIQUIDITY AND CAPITAL RESOURCES

         Wilsons Leather's capital requirements are primarily driven by the
Company's seasonal working capital needs and its strategy to open new stores,
remodel existing stores and upgrade information systems. During the second
quarter of 2001 the Company opened 20 stores net of closings. The Company
anticipates it will open approximately 38 additional stores, net of closings, by
the end of the fiscal year. The Company's peak working capital needs typically
occur during the period from August through early December as inventory levels
are increased in advance of the Company's peak selling season from October
through December.

         General Electric Capital Corporation and a syndicate of banks provide
the Company with a senior credit facility, which was most recently amended on
June 19, 2001. The senior credit facility provides for borrowings of up to $215
million in aggregate principal amount, which includes a term loan of $25.0
million and a letter of credit subfacility of $85.0 million. The maximum amount
available under the senior credit facility is limited to 60% of net inventories
(which increases to 65% during the months of July and October and 70% during the
months of August and September for inventories of the type that Wilsons sold
before the acquisitions of El Portal Group and Bentley's plus a $15.0 million
seasonal advance) less outstanding letters of credit.

         Interest is payable on borrowings at one or more variable rates
determined by LIBOR plus 1.75%, commercial paper rate plus 1.75% or the "prime"
rate plus 0.5%. The spreads are subject to change based on the financial results
and will be decreased by 0.5% on June 19, 2002. Interest is payable on the term
loan at the prime rate plus 4%. Wilsons Leather pays 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. The senior credit facility expires in
May 2004. The senior credit facility contains certain covenants limiting, among
other things, the Company's ability to make capital expenditures, pay cash
dividends or make other distributions.

         The Company plans to use the senior credit facility for its immediate
and future working capital needs, including capital expenditures. For 2000, the
peak borrowings and letters of credit outstanding under the senior credit
facility were $128.8 million and $57.2 million, respectively. The peak time of
year is October through December for borrowings and August through September for
letters of credit. The Company is dependent on the senior credit facility to
fund working capital and letter of credit needs. We are also currently
evaluating opportunuties to access the capital markets to replenish working
capital depleted in previous acquisitions, as well as finance our other capital
needs.

         On February 3, 2001, the Company had $30.6 million of 11-1/4% senior
notes outstanding. As of August 4, 2001, the Company had not reduced this
outstanding balance. The indenture governing the 11-1/4% senior notes contains
numerous operating covenants that limit the discretion of management with
respect to certain business matters and place significant restrictions on, among

                                       13
other things, our ability to incur additional indebtedness, to create liens or
other encumbrances, to declare or pay any dividends, to make certain payments or
investments, loans and guarantees and to sell or otherwise dispose of assets and
merge or consolidate with another entity.

         We entered into a $40.0 million interest rate swap transaction on July
7, 1999 with First Union whereby First Union pays the Company interest at a
fixed rate of 11.25% and the Company pays First Union interest at a commercial
paper rate plus 5.37% (9.04% at August 4, 2001). The agreement terminated on
August 15, 2001. As of August 4, 2001 the transaction had not had a material
impact on the Company's financial position or results of operations.

CASH FLOW ANALYSIS

         Operating activities for the six months ended August 4, 2001, resulted
in cash used of $106.4 million compared to cash used of $94.0 million in the
corresponding period of 2000. The cash used was primarily the result of the
seasonal changes in the Company's current assets and liabilities. The increase
in cash used compared to last year is due primarily to decreases in accounts
payable and accrued expense, and income taxes payable offset by a smaller
increase in inventory.

         Changes in certain balance sheet accounts between February 3, 2001, and
August 4, 2001, reflect normal seasonal variations within the retail industry.
The level of cash and cash equivalents, inventories, accounts receivable,
accounts payable and certain accrued liabilities fluctuate due to the seasonal
nature of the working capital needs of the Company's operations.

         Investing activities for the six months ended August 4, 2001 totaled
$55.3 million and were primarily comprised of capital expenditures for the
renovations of and improvements to existing stores, construction of new stores,
and the acquisition of Bentley's. Investing activities for the six months ended
July 29, 2000 totaled $13.4 million and were primarily comprised of capital
expenditures for a new point-of-sale system, the renovation of and improvements
to existing stores and construction of new stores.

         Financing activities for the six months ended August 4, 2001 provided
net cash of $113.2 million, mainly for the acquisition of Bentley's. For the six
months ended July 29, 2000, $13.0 million of net cash was used, primarily for
the repurchase 11-1/4% senior notes.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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

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

         At August 4, 2001, Wilsons Leather had cash and cash equivalents
totaling $3.6 million. The effect of a 100 basis point change in interest rates
would have an estimated $.2 million pre-tax earnings and cash flow impact,
assuming other variables are held constant.

                                       14
The Company's senior credit facility carries interest rate risk that is
generally related to either LIBOR, commercial paper rate or the prime rate. If
any of those rates were to change while Wilsons Leather was borrowing under the
facility, interest expense would increase or decrease accordingly. As of August
4, 2001, there were $86.2 million in borrowings under the senior credit facility
and $37.2 million in outstanding letters of credit.

         The Company has no earnings or cash flow exposure due to market risks
on its long-term debt obligations as a result of the fixed-rate nature of the
debt. However, interest rate changes would affect the fair market value of the
debt. At August 4, 2001, Wilsons Leather had fixed rate debt of $30.6 million
maturing in August 2004, and $25.0 million maturing in May 2004.

         The Company entered into a $40.0 million interest rate swap transaction
whereby First Union pays the Company interest at a fixed rate of 11.25%, and the
Company pays First Union interest at a commercial paper rate plus 5.37% (9.04%
at August 4, 2001). The agreement terminated on August 15, 2001.

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

         Except for historical information, matters discussed in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements involve risks and uncertainties, and actual results
may be materially different. Because actual results may differ, readers are
cautioned not to place undue reliance on forward-looking statements. Factors
that could cause actual results to differ include: economic downturns; risks
associated with future growth; risks associated with acquisitions; change in
consumer preferences and fashion trends away from leather; seasonality of the
business; risks associated with foreign sourcing and international business;
disruptions in product supplies to our travel stores; decreased availability and
increased cost of leather; changes in customer shopping patterns, competition in
our markets; loss of key members of our management team; risks associated with
our debt service; reliance on third parties for maintaining our management
information systems; concentration of our common stock; and volatility of the
Company common stock. Certain of these risk factors are more fully discussed in
the Company's Annual Report on Form 10-K for the fiscal year ended February 3,
2001.

                                       15
PART II - OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES

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

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         At the Company's 2001 Annual Meeting of Shareholders held on June 6,
2001, the shareholders approved the following:

(a)      The election of directors.  Each nominated director was elected as
         follows:

         Director-Nominee          Votes For                 Votes Withheld
         ----------------          ---------                 --------------

         Lyle Berman               12,759,816.798               1,802,684
         Thomas J. Brosig          14,446,477.798                 116,023
         Gary L. Crittenden        12,759,816.798               1,802,684
         Morris Goldfarb           14,446,477.798                 116,023
         Marvin Goldstein          14,466,477.798                 116,023
         David L. Rogers           13,896,917.798                 665,583
         Joel N. Waller            13,896,917.798                 665,583

(b)      Ratification of the appointment of Arthur Andersen LLP as the
         independent public accountants of the Company for the fiscal year
         ending February 2, 2002.

         The proposal received 14,509,221.582 votes for and 52,220 votes
         against. There were 1,059.216 abstentions and 0 broker non-votes.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         A.       Exhibits

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

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

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

                  4.1      Specimen of Common Stock Certificate.

                                       16
4.2      Indenture dated as of August 18, 1997 by and among
                           Wilsons The Leather Experts Inc., the other
                           corporations listed on the signature pages thereof,
                           and Norwest Bank Minnesota, National Association,
                           including specimen Certificate of 11 1/4% Series A
                           Senior Notes due 2004 and specimen Certificate of 11
                           1/4% Series B Senior Notes due 2004.

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

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

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

                  10.1     Third Amended and Restated Credit Agreement dated as
                           of June 19, 2001 among Wilsons Leather Holdings Inc.,
                           as Borrower, the Lenders signatory thereto from time
                           to time, as Lenders, General Electric Capital
                           Corporation as Agent, Lender, Term Lender and Swing
                           Line Lender, GECC Capital Markets Group, Inc. as Lead
                           Arranger, Fleet National Bank, as Lender and
                           Documentation Agent and First Union National Bank, as
                           Lender and Syndication Agent.

                  10.2     Amended and Restated Security Agreement dated as of
                           June 19, 2001 between Wilsons Leather Holdings Inc.
                           and other Grantors listed on the signature pages
                           thereto, in favor of General Electric Capital
                           Corporation in its capacity as Agent for Lenders.

                  10.3     Reaffirmation of Guaranty dated as of June 19, 2001
                           by Wilsons The Leather Experts, Inc., Wilsons Center,
                           Inc., Rosedale Wilsons Inc., River Hills Wilsons,
                           Inc. and the Store Guarantors listed on the signature
                           pages thereto in favor of General Electric Capital
                           Corporation as Agent for Lenders.

                                       17
10.4     Mortgage, Security Agreement, Assignment of Leases
                           and Rents and Financing Statement dated as of June
                           19, 2001 by Bermans The Leather Experts Inc. in favor
                           of General Electric Capital Corporation as Agent for
                           Lenders.

                  10.5     Mortgage, Security Agreement, Assignment of Leases
                           and Rents, Financing Statement and Fixture Filing
                           dated as of June 19, 2001 by Bentley's Luggage Corp.
                           in favor of General Electric Capital Corporation as
                           Agent for Lenders.

         B.       Exhibits and Reports on Form 8-K: The Company filed one report
                  on Form 8-K during the second quarter ended August 4, 2001, as
                  follows:

                  Form 8-K filed June 25, 2001, announcing the amendment of the
                  senior credit facility with General Electric Capital
                  Corporation and a syndicate of banks and filing as exhibits
                  the Third Amended and Restated Credit Agreement dated as of
                  June 19, 2001, the Amended and Restated Agreement as of June
                  19, 2001, the Reaffirmation of Guaranty dated as of June 19,
                  2001, the Mortgage, Security Agreement, Assignment of Leases
                  and Rents, Financing Statement and Fixture Filing dated as of
                  June 19, 2001 by Berman's The Leather Experts Inc. in favor of
                  General Electric Capital Corporation as Agent for Lenders, and
                  the Mortgage, Security Agreement, Assignment of Leases and
                  Rents, Financing Statement and Fixture Filing dated as of June
                  19, 2001 by Bentley's Luggage Corp. in favor of General
                  Electric Capital Corporation as Agent for Lenders.

                                       18
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

WILSONS THE LEATHER EXPERTS INC.

By: /s/ Peter G. Michielutti
    ----------------------------------
         Peter G. Michielutti
         Senior Vice President and
         Chief Financial Officer

Date:    September 18, 2001

                                       19
INDEX TO EXHIBITS
Exhibit No.  Description                                                     Method of Filing
-----------  -----------                                                     ----------------
3.1          Amended and Restated  Articles of  Incorporation  of Wilsons
             The Leather  Experts Inc.  adopted June 16, 1998, as amended
             by the Articles of Amendment dated February 17, 2000. (1).....  Incorporated by Reference

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

4.1          Specimen of Common Stock Certificate. (2).....................  Incorporated by Reference

4.2          Indenture dated as of August 18, 1997 by and among Wilsons The
             Leather Experts Inc., the other corporations listed on the
             signature pages thereof, and 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 Reference

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

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

4.5          Amendment to Registration Rights Agreement dated as of
             August 12, 1999 by and among Wilsons The Leather Experts
             Inc. and the Shareholders listed on the attachments
             thereto. (6)..................................................  Incorporated by Reference

10.1         Third Amended and Restated Credit Agreement dated as of
             June 19, 2001 among Wilsons Leather Holdings Inc., as
             Borrower, the Lenders signatory thereto from time to time,
             as Lenders, General Electric Corporation, as Agent, Lender,
             Term
20
Lender and Swing Line Lender, GECC Capital Markets
             Group, Inc. as Lead Arranger, Fleet National Bank, as
             Lender and Documentation Agent and First Union National
             Bank, as Lender and Syndication Agent. (7)....................  Incorporated by Reference

10.2          Amended and Restated Security Agreement dated as of June
             19, 2001 between Wilsons Leather Holdings Inc. and other
             Grantors listed on the signature pages thereto, in favor of
             General Electric Capital Corporation in its capacity as
             Agent for Lenders. (7)........................................  Incorporated by Reference

10.3         Reaffirmation of Guaranty dated as of June 19, 2001 by
             Wilsons The Leather Experts, Inc., Wilsons Center, Inc.,
             Rosedale Wilsons Inc., River Hills Wilsons, Inc. and the
             Store Guarantors listed on the signature pages thereto in
             favor of General Electric Capital Corporation as Agent for
             Lenders. (7)..................................................  Incorporated by Reference

10.4         Mortgage, Security Agreement, Assignment of Leases and
             Rents and Financing Statements dated as of June 19, 2001 by
             Bermans The Leather Experts Inc. in favor of General
             Electric Capital Corporation as Agent for Lenders. (7)........  Incorporated by Reference

10.5         Mortgage, Security Agreement, Assignment of Leases and
             Rents, Financing Statement and Fixture Filing dated as of
             June 19, 2001 by Bentley's Luggage Corp. in favor of
             General Electric Capital Corporation as Agent for
             Lenders. (7)..................................................  Incorporated by Reference
(1)      Incorporated by reference to the same numbered exhibit to the Company's
         Report on Form 10-K for the fiscal year ended January 29, 2000 filed
         with the Commission (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 (File No. 0-21543).

(4)      Incorporated by reference to Exhibit 10.4 to the Company's Report on
         Form 10-Q for the quarter ended August 2, 1997 filed with the
         Commission (File No. 0-21543).

                                       21
(5)      Incorporated by reference to Exhibit 4.8 to the Company's Registration
         Statement on Form S-1 (333-13967) filed with the Commission on October
         11, 1996.

(6)      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).

(7)      Incorporated by reference to the same numbered exhibit to the Company's
         Report on Form 8-K filed with the Commission on June 25, 2001 (File No.
         0-21543).

                                       22