WILSONS THE LEATHER EXPERTS INC, DEF 14A, 1999-04-16

WILSONS THE LEATHER EXPERTS INC
DEF 14A, 1999-04-16
FAMILY CLOTHING STORES

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<PAGE>

SCHEDULE 14A
(Rule 14a-101]
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [x]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[x] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

WILSONS THE LEATHER EXPERTS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.

<PAGE>

WILSONS THE LEATHER EXPERTS INC.

7401 Boone Avenue North
Brooklyn Park, Minnesota 55428

April 19, 1999
Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
Wilsons The Leather Experts Inc., a Minnesota corporation (the "Company"), to
be held at The Northland Inn, 7025 Northland Drive, Brooklyn Park, Minnesota,
commencing at 10:00 a.m., Central Daylight Time, on Tuesday, May 18, 1999.

The Secretary's Notice of Annual Meeting and the Proxy Statement which
follow describe the matters to come before the meeting. During the meeting, we
will also review the activities of the past year and items of general interest
about the Company.

It is important that your shares be represented at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting in person, please
complete, sign and date the enclosed proxy card and return it in the enclosed
postage-paid envelope as promptly as possible. If you later desire to revoke
the proxy, you may do so at any time before it is exercised.

Sincerely,

/s/ Joel N. Waller

Joel N. Waller
Chairman of the Board and Chief Executive Officer
<PAGE>

WILSONS THE LEATHER EXPERTS INC.

NOTICE OF ANNUAL MEETING

The Annual Meeting of Shareholders of Wilsons The Leather Experts Inc., a
Minnesota corporation (the "Company"), will be held at The Northland Inn, 7025
Northland Drive, Brooklyn Park, Minnesota, on Tuesday, May 18, 1999,
commencing at 10:00 a.m., Central Daylight Time, for the following purposes:

1. To elect seven directors to serve until the next Annual Meeting of
Shareholders or until their successors are duly elected and qualified.

2. To approve and adopt the Wilsons The Leather Experts Inc. Employee Stock
Purchase Plan.

3. To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company for the fiscal year ending January 29, 2000.

4. To act upon any other business that may properly be brought before the
meeting.

The Board of Directors of the Company has fixed April 9, 1999 as the record
date for the meeting and only shareholders of record at the close of business
on that date are entitled to receive notice of and vote at the meeting and at
any adjournments thereof.

Your proxy is important to ensure a quorum at the meeting. Please complete,
sign, date and return your proxy in the enclosed postage-paid envelope,
whether or not you plan to attend the meeting. Your cooperation in promptly
signing and returning your proxy will help the Company avoid further
solicitation expense. You may revoke the proxy at any time prior to it being
exercised, and returning your proxy will not affect your right to vote in
person if you attend the meeting and revoke the proxy.

By Order of the Board of Directors,

/s/ Philip S. Garon

Philip S. Garon
Secretary

Brooklyn Park, Minnesota
April 19, 1999
<PAGE>

WILSONS THE LEATHER EXPERTS INC.
7401 BOONE AVENUE NORTH
BROOKLYN PARK, MINNESOTA 55428

PROXY STATEMENT

General Information Regarding the Solicitation

The enclosed proxy is being solicited by the Board of Directors (the "Board
of Directors" or "Board") of Wilsons The Leather Experts Inc., a Minnesota
corporation (the "Company"), for use in connection with the Annual Meeting of
Shareholders to be held on Tuesday, May 18, 1999, at The Northland Inn, 7025
Northland Drive, Brooklyn Park, Minnesota, commencing at 10:00 a.m., Central
Daylight Time, and at any adjournments thereof.

Only shareholders of record at the close of business on April 9, 1999 will
be entitled to vote at the meeting or adjournments. Proxies in the
accompanying form which are properly signed, duly returned to the Company and
not revoked will be voted in the manner specified. If no instructions are
indicated, properly executed proxies will be voted for the proposals set forth
in this Proxy Statement. A shareholder executing a proxy may revoke it at any
time before it is exercised by notice in writing to an officer of the Company
or by properly signing and duly returning a proxy bearing a later date. The
mailing of this Proxy Statement and form of proxy to shareholders will
commence on or about April 19, 1999.

As of the date of this Proxy Statement, the Board of Directors of the
Company and management know of no other matters, other than those described in
the Notice of Annual Meeting and this Proxy Statement, that are to come before
the meeting. If any other matters are properly presented at the meeting and
call for a vote of shareholders, the persons named in the enclosed form of
proxy and acting thereunder will have the discretion to vote on such matters
in accordance with their best judgment, subject to applicable federal
securities rules.

The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by the use of the mails, certain directors,
officers and employees of the Company may solicit proxies by telephone,
telecopier, telegram or personal contact, and have requested brokerage firms
and custodians, nominees and other record holders to forward soliciting
materials to the beneficial owners of stock of the Company and will reimburse
them for their reasonable out-of-pocket expenses in so forwarding such
materials.

The address of the principal executive office of the Company is 7401 Boone
Avenue North, Brooklyn Park, Minnesota 55428, and the Company's telephone
number is 612-391-4000.

Required Vote to Elect the Directors and Approve the Proposals

The common stock of the Company, par value $.01 per share, is the only
authorized and issued voting security of the Company. At the close of business
on April 9, 1999, there were 10,835,454 shares of common stock of the Company
issued and outstanding, each of which is entitled to one vote. Holders of
common stock are not entitled to cumulate their votes for the election of
directors.

The affirmative vote of the holders of a majority of the outstanding shares
of common stock of the Company present in person or represented by proxy and
entitled to vote on each matter to be acted upon at the meeting is required
for the approval of such matter. For this purpose, a shareholder voting
through proxy who abstains with respect to the matter is considered to be
present and entitled to vote on the matter, and is in effect casting a
negative vote, but a shareholder (including a broker) who does not give
authority to a proxy to vote, or withholds authority to vote, shall not be
considered present and entitled to vote on the matter.

Holders of a majority of the shares of the common stock of the Company
entitled to vote and present at the meeting constitute a quorum for purposes
of the meeting. Abstentions are counted as being present at the meeting and
entitled to vote for purposes of determining the presence or absence of a
quorum for the transaction of business.
<PAGE>

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

The following table sets forth, as of April 1, 1999 except as otherwise
noted, the beneficial ownership of the common stock by (i) each person known
by the Company beneficially to hold more than 5% of the outstanding common
stock, (ii) each director or nominee for director of the Company, (iii) each
officer of the Company named in the Summary Compensation Table on page 10 and
(iv) all executive officers and directors of the Company as a group. Except as
otherwise noted, the listed beneficial owner has sole voting and investment
power with respect to the listed shares.

<TABLE>
<CAPTION>
Amount and Nature of Percentage of
Name and Address of Beneficial Owner Beneficial Ownership Outstanding Shares
- ------------------------------------ -------------------- ------------------
<S> <C> <C>
Neil I. Sell, as sole trustee of
four irrevocable trusts for the
benefit of Lyle Berman's children,
and of two irrevocable trusts for
the benefit of David Rogers'
children and on behalf of himself .. 2,208,415.8(/1/) 20.4%
3300 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
Morris Goldfarb..................... 2,004,830.0(/2/) 18.5
G-III Apparel Group, Ltd.
512 Seventh Avenue
New York, NY 10018
Joel N. Waller...................... 1,142,285.3(/3/) 10.5
7401 Boone Avenue North
Brooklyn Park, MN 55428
David L. Rogers..................... 988,774.5(/4/) 9.1
7401 Boone Avenue North
Brooklyn Park, MN 55428
Wellington Management Company, LLP.. 947,600.0(/5/) 8.7
75 State Street
Boston, MA 02109
Wellington Trust Company, NA
75 State Street
Boston, MA 02109
Lyle Berman......................... 322,630.0(/6/) 3.0
Thomas J. Brosig.................... 18,200.0(/7/) *
Gary L. Crittenden.................. -- --
Marvin W. Goldstein................. 6,000.0 *
Carol S. Lund....................... 179,833.8(/8/) 1.7
John Serino......................... 25,000.0(/9/) *
John Fowler......................... 31,648.2(/10/) *
All executive officers and directors
as a group (16 persons)............ 5,053,441.7(/11/) 45.8
</TABLE>
- --------
* Represents less than 1%.

(1) Includes 1,836,000 shares of common stock held in four irrevocable
trusts for the benefit of Lyle Berman's children and 125,560.8 shares of
common stock held in two irrevocable trusts for the benefit of David
Rogers' children. Mr. Sell has disclaimed beneficial ownership of such
shares.

(2) Includes 151,800 shares of common stock owned by the Goldfarb Family
Partners L.L.C. of which Mr. Goldfarb is the manager. The LLC has the
right to receive dividends from, and the proceeds of the sale of, the
shares of common stock held by it. Also includes options which are
currently exercisable to purchase 11,000 shares of common stock.

2
<PAGE>

(3) Includes 100,000 shares of common stock owned by the Waller Family
Limited Partnership of which Mr. Waller is a general partner; 3,000
shares of common stock owned by Mr. Waller's spouse and Mr. Waller's
mother jointly; and 1,000 shares of common stock owned by Mr. Waller's
spouse. Mr. Waller disclaims beneficial ownership of such shares. Also
includes options which are currently exercisable to purchase 33,000
shares of common stock.

(4) Includes options which are currently exercisable to purchase 33,000
shares of common stock.

(5) Wellington Management Company, LLP has shared power to vote 437,100 of
such shares and shared power to dispose of all of such shares. These
shares include shares over which Wellington Trust Company, NA, a wholly-
owned subsidiary of Wellington Management Company, LLP, exercises shared
voting and/or dispositive power. The information relating to the
beneficial ownership of Wellington Management Company, LLP and Wellington
Trust Company, NA has been derived from the Schedule 13G dated December
31, 1998 filed by Wellington Management Company, LLP with the Securities
and Exchange Commission. The number of shares beneficially owned by
Wellington Management Company, LLP and Wellington Trust Company, NA is
stated as of December 31, 1998.

(6) Includes options which are currently exercisable to purchase 11,000
shares of common stock.

(7) Includes options which are currently exercisable to purchase 18,200
shares of common stock.

(8) Includes options which are currently exercisable to purchase 30,000
shares of common stock; information is stated as of January 30, 1999.

(9) Includes options which are currently exercisable to purchase 25,000
shares of common stock.

(10) Includes options which are currently exercisable to purchase 15,000
shares of common stock.

(11) Includes options which are currently exercisable to purchase 187,200
shares of common stock.

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<PAGE>

PROPOSAL NUMBER ONE

ELECTION OF DIRECTORS

At the meeting, the shareholders will be asked to elect seven directors to
hold office until the next annual meeting of shareholders or until their
successors are elected and qualified. The Company's by-laws provide that the
shareholders at each regular meeting shall determine the number of directors
to constitute the Board of Directors and that the shareholders or the Board
may thereafter increase the number of directors or the shareholders may
decrease the number of directors, provided that the Company's Amended and
Restated Articles of Incorporation state that the Board of Directors shall
consist of not less than five or more than nine members. The Board has
nominated the seven current members of the Board named below. Proxies
solicited by the Board of Directors will, unless otherwise directed, be voted
to elect the seven nominees named below to constitute the entire Board.

Each nominee is currently serving as a director of the Company and has
indicated a willingness to serve as a director for the ensuing year. In case
any nominee is not a candidate at the meeting, the proxies named in the
enclosed form of proxy intend to vote in favor of the remainder of the
nominees and to vote for a substitute nominee in their discretion. Information
regarding the nominees as of April 1, 1999, is set forth below.

<TABLE>
<CAPTION>
Director
Name Age Since
---- --- -------------
<S> <C> <C>
Joel N. Waller......................................... 59 May 1996
David L. Rogers(/1/)................................... 56 May 1996
Lyle Berman............................................ 57 May 1996
Thomas J. Brosig(/1/).................................. 49 May 1996
Gary L. Crittenden(/2/)................................ 45 December 1998
Morris Goldfarb(/1/)................................... 48 May 1996
Marvin W. Goldstein(/1/)(/2/).......................... 55 December 1998
</TABLE>
- --------
(1) Current member of Audit Committee
(2) Current member of Compensation Committee

Joel N. Waller has served as Chairman and Chief Executive Officer of the
Company since its inception in May 1996 and was Chairman and Chief Executive
Officer of one of the predecessor companies to the Company (together with the
Company, "Wilsons") since April 1992. In 1983, CVS New York, Inc. (formerly
Melville Corporation, "CVS") hired Mr. Waller as President of Wilsons, and he
served in such capacity until April 1992. Prior to joining Wilsons, Mr. Waller
served in several capacities at Bermans the Leather Experts Inc. ("Bermans"),
including Senior Vice President--General Merchandise Manager from 1980 to
1983, Division Merchandise Manager from 1978 to 1980 and Buyer from 1976 to
1978. Mr. Waller is also a director of Lakes Gaming, Inc., Rainforest Cafe,
Inc. and Damark International, Inc.

David L. Rogers has served as President and Chief Operating Officer of
Wilsons since April 1992. In 1988, Mr. Rogers joined Wilsons as Executive Vice
President and Chief Operating Officer when Bermans was acquired by Wilsons,
and he served in such capacity until April 1992. Mr. Rogers served as Chief
Operating Officer of Bermans from 1984 to 1988 and Chief Financial Officer of
Bermans from 1980 to 1984. Mr. Rogers is also a director of Lakes Gaming, Inc.
and Rainforest Cafe, Inc.

Lyle Berman has served as Chairman of the Board and Chief Executive Officer
of Lakes Gaming, Inc., a gaming company ("Lakes Gaming"), since January 1999.
Mr. Berman served as Chairman of the Board of Grand Casinos, Inc., a gaming
company ("Grand Casinos"), from October 1990 to December 1998 and as Chief
Executive Officer of Grand Casinos from October 1990 to March 1998. Mr. Berman
has served as Chief Executive Officer and Chairman of the Board of Rainforest
Cafe, Inc., a restaurant/retail company ("Rainforest Cafe"), since February
1994. From January 1989 through September 1991, Mr. Berman served as a
consultant

4
<PAGE>

to Wilsons. Mr. Berman served as the President and Chief Executive Officer of
Bermans from 1978 until it was acquired by Wilsons in 1988. Mr. Berman is also
a director of G-III Apparel Group, Ltd., New Horizon Kids Quest, Inc.,
Innovative Gaming Corporation of America and Park Place Entertainment
Corporation. Mr. Berman was an executive officer and a director of
Stratosphere Corporation, an amusement and recreation company, from February
1993 to July 1997. In January 1997, Stratosphere Corporation filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Gary L. Crittenden has served as Senior Vice President and Chief Financial
Officer of Monsanto Company, a chemical manufacturer and seller of diversified
lines of agricultural, nutrition, pharmaceutical and consumer products, since
1998. Mr. Crittenden served as Executive Vice President and Chief Financial
Officer of Sears, Roebuck and Co., a multi-line retailer, from 1997 to 1998.
Mr. Crittenden also served as the President of the hardware division of Sears,
Roebuck and Co. in 1997 and as its Executive Vice President, Strategy and
Business Development from 1996 to 1997. Mr. Crittenden served as the Senior
Vice President and Chief Financial Officer of CVS, a specialty retailer, from
1994 to 1996. He also served as Senior Vice President of Operations and as
Executive Vice President and Chief Financial Officer of Filene's Basement
Corp., an off-price specialty retailer, from 1991 to 1994. Mr. Crittenden is
also a director of Ryerson Tull, Inc.

Thomas J. Brosig has served as President of the Mid-South Region of Park
Place Entertainment Corporation, a gaming company, and as President of Lakes
Gaming since January 1999. Mr. Brosig served as Chief Executive Officer of
Grand Casinos from March 1998 to December 1998, and as President and a
director of Grand Casinos from September 1996 to December 1998. Mr. Brosig
also served as Executive Vice President--Investor Relations and Special
Projects of Grand Casinos from August 1994 to September 1996, as Secretary of
Grand Casinos from its inception until May 1995, as its President from May
1993 to August 1994, as its Chief Operating Officer from October 1991 until
May 1993 and as its Chief Financial Officer from its inception until January
1992. Mr. Brosig is also a director of G-III Apparel Group, Ltd., Famous
Dave's of America, Inc. and Lakes Gaming.

Morris Goldfarb serves as Chairman of the Board and Chief Executive Officer
of G-III Apparel Group, Ltd., a leather and non-leather apparel manufacturer
and distributor ("G-III"). Mr. Goldfarb has served as an executive officer and
director of G-III and its predecessors since its formation in 1974. Mr.
Goldfarb is also a director of Lakes Gaming and Panasia Bank.

Marvin W. Goldstein has been a private investor since 1997. Mr. Goldstein
served as Executive Vice President and Chief Operating Officer of Regis
Corporation, a national chain of hair salons, from April 1997 to August 1997.
He was Chairman of the Board, Chief Executive Officer and President of Pet
Food Warehouse, Inc., a specialty retailer of pet supplies, from August 1995
to April 1997. Mr. Goldstein also served as President and Chief Operating
Officer, Chairman of the Board and Chief Executive Officer, President, All
Merchandise/Marketing and Executive Vice President, General Merchandise
Manager of the Department Store Division of Dayton Hudson Corporation from
1988 to September 1994. He also served as Senior Vice President, General
Merchandise Manager and Senior Vice President, Stores for R.H. Macy,
California from 1981 through 1987; as Vice President, General Merchandise
Manager of Carter Hawley Hale, Inc. from 1976 to 1981; and as Divisional
Merchandise Manager, Buyer and Associate Buyer of the Department Store
Division of Dayton Hudson Corporation from 1966 to 1976. Mr. Goldstein is also
a director of Buffets, Inc., Paper Warehouse, Inc., Appliance Recycling
Centers of America, Inc. and Greenspring Company.

Committees of the Board of Directors and Meeting Attendance

The Board of Directors has created an Audit Committee and a Compensation
Committee. The members of each of these committees are appointed by the full
Board. The Board has not appointed a nominating committee.

The Audit Committee reviews accounting and auditing principles and
procedures of the Company with a view toward providing for adequate internal
controls and reliable financial records. To this end, it recommends to the
full Board the engagement of independent auditors, reviews with the
independent auditors the plans and results

5
<PAGE>

of the auditing engagement, and considers the independence of the Company's
auditors. The current members of the Audit Committee are identified above. The
Audit Committee met twice during the last fiscal year.

The Compensation Committee reviews and determines the Company's executive
compensation objectives and policies and administers the Company's stock
option plans and other employee benefit plans. The current members of the
Compensation Committee are the non-employee directors identified above. The
Compensation Committee met eleven times during the last fiscal year and took
written action in lieu of meeting on eight occasions.

The Board of Directors met six times during the fiscal year ended January
30, 1999. Each director attended more than 75% of the meetings of the Board of
Directors and Board committees on which he serves during the time period in
which he was a director.

Director Compensation

The Company does not currently pay cash compensation to members of the Board
of Directors for their services as directors. Board members who incur
reasonable and customary travel expenses to attend the Company's board
meetings are reimbursed for such travel expenses.

The Company has granted stock options to its non-employee directors. Such
options vest, cumulatively, on a pro rated basis on each of the first, second
and third anniversaries of the date of grant if the optionee continues as a
director, subject to the possible acceleration of vesting in certain
circumstances. On June 26, 1996 and January 28, 1998, the Company granted
options for 10,800 and 33,000 shares of common stock, respectively, to Thomas
J. Brosig at an exercise price of $4.44 and $8.75 per share, respectively. As
of April 1, 1999, options for 18,200 shares had vested for Mr. Brosig. On
January 28, 1998, the Company also granted a stock option for 33,000 shares of
common stock of the Company to each of Lyle Berman and Morris Goldfarb at an
exercise price of $8.75 per share. As of April 1, 1999, options for 11,000
shares of common stock had vested with respect to each of these individuals.
On December 4, 1998, the Company granted a stock option for 33,000 shares of
common stock of the Company to each of Gary Crittenden and Marvin Goldstein at
an exercise price of $9.9375 per share.

Voting Requirements

The affirmative vote of the holders of the majority of the outstanding
shares of common stock of the Company present in person or represented by
proxy and entitled to vote on the election of directors is required to elect
the directors. A shareholder voting through proxy who abstains with respect to
the election of directors is considered to be present and entitled to vote,
and is in effect casting a negative vote, but a shareholder (including a
broker) who does not give authority to a proxy to vote, or withholds authority
to vote, on the election of directors is not considered present and entitled
to vote.

Voting Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ALL NOMINEES LISTED
ABOVE.

6
<PAGE>

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee, comprised entirely of non-employee directors,
reviews and approves the general compensation philosophies and policies of the
Company and determines the specific compensation for each of the Company's
executive officers. In addition, the Compensation Committee is responsible for
administering the Company's stock option plans and approving grants made in
connection therewith.

Executive Compensation Philosophy

The Company's compensation program for executive officers is designed to
promote the financial performance, business strategies and other values and
objectives of the Company. This program seeks to enhance shareholder value by
linking the financial interests of the Company's executives with those of its
shareholders. The Company has developed and implemented an executive
compensation program based on a pay-for-performance philosophy to achieve the
following objectives:

. To attract and retain high-caliber executive officers who are capable of
leading the Company in the achievement of its business objectives;

. To provide compensation awards which are highly competitive;

. To motivate and reward executives based on achievement of Company and
individual performance objectives; and

. To provide a maximum return on the Company's investment in resources to
shareholders by linking a significant portion of total compensation to
the financial results of the Company and the market value of the
Company's common stock.

The Compensation Process

Compensation Review

The Board of Directors approves Company financial goals and performance
measures prior to the beginning of the fiscal year along with individual goals
and objectives for the Chairman and Chief Executive Officer (the "CEO") and
the President and Chief Operating Officer (the "COO"). The Compensation
Committee reviews and approves the base salaries for each executive officer,
including the CEO and COO. After year-end, the CEO and COO, along with the
Vice President of Human Resources, present to the Compensation Committee the
assessment of results.

The Compensation Committee received a thorough review and presentation of
total compensation for executive officers in fiscal 1998. Total compensation
under the Company's compensation program for executive officers for 1998 was
generally established to be between the 50th and 75th percentile of companies
included in certain retail compensation surveys, depending upon the particular
officer's position, responsibilities and the degree of difficulty and
challenge associated with the performance objectives.

The Company's executive compensation program consists of three key elements:
(1) base salary; (2) short-term incentive, i.e., annual bonus; and (3) long-
term incentive, i.e. stock options. In addition, the executive officers
receive health and dental benefits and participate in the Company's 401(k)
Profit Sharing Plan on the same bases as other full-time employees of the
Company. The policies and the bases for determining executive compensation and
specifically that of the CEO and COO are described below:

Base Salary

Base salaries for executive officers, with the exception of the CEO and COO,
are determined by reviewing and comparing salaries, and the corresponding job
descriptions, offered for similar positions by utilizing certain retail
compensation surveys and by reviewing salaries of persons with comparable
qualifications, experience and responsibilities at other companies of
comparable size in the retail industry. After reviewing these salaries and

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<PAGE>

job descriptions, the Company establishes a range of salaries paid for various
executive positions. Base salaries are set within these competitive salary
bands based on individual contributions and sustained performance. As an
executive officer's level of responsibility increases, a greater portion of
the total compensation package is based on incentive compensation, described
below, which may cause greater variability in the individual's overall
compensation package from year to year. In addition, the more responsibility
that an executive officer assumes in the organization, the more the
compensation package shifts to reliance on appreciation of the value of the
Company's stock through stock options.

Short-Term Incentive Compensation

The Company's Executive and Key Management Incentive Plan (the "Incentive
Plan") has been developed to provide opportunities to motivate and reward key
employees through annual cash incentive awards. All executive officers are
eligible to participate in the Incentive Plan. The Incentive Plan rewards
executives for attaining pre-determined Company goals which are intended to
create shareholder value through an increase in the market value of the
Company's common stock. Awards are based on actual results measured against
pre-established corporate financial objectives for consolidated earnings
before federal and state income taxes of the Company and its direct and
indirect subsidiaries ("EBT"). An award amount, expressed as a percentage of
base salary at the beginning of the fiscal year, is established for each
participant each fiscal year and is approved by the Compensation Committee.
Such award amount may be adjusted depending on whether the EBT of the Company
for the fiscal year is above or below the pre-established corporate financial
objectives for EBT.

Long-Term Incentive Compensation

The 1996 Stock Option Plan (the "1996 Option Plan") was developed to enhance
the total compensation package for key management and, in particular, to link
compensation to the market value of the Company's common stock. The desired
goal is to retain and develop personnel capable of assuring the future success
of the Company by affording them an opportunity to acquire a proprietary
interest in the Company through stock options. Stock option grants are
intended to align executives' interests in managing the Company with
shareholders' interests. The Compensation Committee generally grants stock
options to new executive officers upon appointment as an executive officer.
The Compensation Committee also grants stock options at its discretion to
executive officers based on several factors (which are not given a particular
relative weight), including increases in the level of responsibility,
promotions, sustained exceptional performance over a period of time and
overall stock performance. In granting new options, the Compensation Committee
will also take into account the number of options already granted to an
officer. All outstanding stock options granted since the Company became a
publicly held corporation have been granted at an option price equal to the
Fair Market Value (as defined in the 1996 Option Plan) of the common stock on
the date of grant and generally vest, cumulatively, on a prorated basis on
each of the first, second and third anniversaries of the date of grant.

Compensation of Chief Executive Officer and Chief Operating Officer

The Company has entered into employment agreements with Joel Waller, as CEO,
and David Rogers, as COO, through May 25, 2000 (the "Employment Agreements").
Under the terms of the Employment Agreements, Mr. Waller and Mr. Rogers each
receives a base salary of $380,000 per year, or such higher amount as is
determined by the Board (prorated for any partial employment year). See
"Employment Contracts" below.

The Compensation Committee evaluates the performance and fixes the base
salary of the CEO and COO on an annual basis based on its assessment of their
past performance and its expectation as to their future contributions in
leading the Company and on the process described under "Base Salary" above. In
setting 1998 base salaries, the Compensation Committee considered a number of
factors, such as the effectiveness of the CEO and COO in establishing the
Company's strategic direction and providing leadership which enables the
management team to maximize its performance compared to the competition. In
addition, the Compensation Committee also considered significant
accomplishments during the prior year and other performance factors,

8
<PAGE>

including the Company's ability to secure financing, reduce and control
expenses, and efficiently use working capital to achieve goals. Factors
considered by the Compensation Committee in determining the CEO's and COO's
base salary are not subject to any specific weighting factor or formula.

The annual cash bonus for Messrs. Waller and Rogers, if any, is awarded
under the Incentive Plan and is entirely dependent on the accomplishment by
the Company of certain corporate goals approved by the Board as discussed
above. Pursuant to the provisions of the Incentive Plan, Mr. Waller's and Mr.
Rogers' respective bonuses for a fiscal year could range from 0% to 70% of
their base salary. For fiscal year 1998, each of them received a cash bonus of
$170,240.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
corporation's chief executive officer or any of the four other most highly
compensated executive officers. The Company, however, is currently eligible
for grandfathering relief from Section 162(m). Accordingly, the Company's
compensation deductions are not subject to the Section 162(m) limitations
otherwise applicable to a publicly-traded company.

COMPENSATION COMMITTEE

Thomas J. Brosig, Chairman
Lyle Berman

9
<PAGE>

EXECUTIVE COMPENSATION

The Company was incorporated in May 1996. The following table sets forth the
compensation for the 1998 fiscal year ended January 30, 1999, for the 1997
fiscal year ended January 31, 1998 and for the 36-week period of the 1996
fiscal year from May 26, 1996 to February 1, 1997 of the Chief Executive
Officer of the Company and the four other most highly compensated executive
officers of the Company (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
- -------------------------------------------------------------------------------------
<CAPTION>
Long-Term
Compensation
----------------
Annual
Name and Principal Compensation Securities
Position Fiscal ------------------ Underlying All Other
- ------------------ Year Salary Bonus Options (Shares) Compensation(/1/)
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joel N. Waller.......... 1998 $380,000 $170,240 -- $14,716
Chairman and Chief
Executive Officer 1997 380,000 148,960 99,000 12,542
1996 263,077 124,222 -- 11,895
David L. Rogers......... 1998 380,000 170,240 -- 14,577
President and Chief
Operating Officer 1997 380,000 148,960 99,000 12,542
1996 263,077 124,222 -- 12,087
Carol S. Lund(/2/)...... 1998 259,996 106,288 -- 11,182
Executive Vice
President 1997 248,269 78,400 30,000 10,254
1996 166,154 62,765 -- 9,669
John Serino(/3/)........ 1998 216,346 159,500 -- 57,914
Executive Vice
President, Store Sales 1997 -- -- 75,000 --
1996 -- -- -- --
John Fowler(/4/)........ 1998 231,750 88,330 30,000 98,517
Senior Vice President,
General 1997 -- -- -- --
Merchandise Manager 1996 -- -- -- --
- -------------------------------------------------------------------------------------
</TABLE>
(1) Amounts reported for 1998 represent term life insurance premiums paid for
Mr. Waller ($3,118), Mr. Rogers ($2,979), Ms. Lund ($722), Mr. Serino
($580) and Mr. Fowler ($341); the Company's matching contributions on the
Company's 401(k) Profit Sharing Plan in the following amounts: Mr. Waller
($4,398), Mr. Rogers ($4,398), Ms. Lund ($3,260), Mr. Serino ($3,100) and
Mr. Fowler ($1,442); and the Company's profit sharing contributions of
$7,200 per Named Executive Officer. The amounts reported for 1998 also
include payments of $47,034 made to Mr. Serino for reimbursement of moving
and temporary living expenses and payments of $89,534 made to Mr. Fowler
for reimbursement of housing and living expenses abroad. Amounts reported
for 1997 and 1996 represent life insurance premiums paid for the Named
Executive Officers, together with profit sharing contributions and 401(k)
matching contributions under the Company's 401(k) Profit Sharing Plan.

(2) Carol S. Lund resigned from the Company effective January 30, 1999. In
connection with her resignation, the Company entered into an agreement
with Ms. Lund to provide severance pay of $390,000 less applicable taxes,
to accelerate the vesting of 20,000 stock options and to extend the
expiration date of her stock options to January 30, 2001.

(3) John Serino was named an executive officer of the Company in January 1998.

(4) John Fowler was named an executive officer of the Company in May 1998.

10
<PAGE>

Stock Options

The following table provides certain information concerning grants of stock
options during the fiscal year ended January 30, 1999 to the Named Executive
Officers. In accordance with the rules of the Securities and Exchange
Commission, the table sets forth the potential realizable value over the terms
of the options (the period from the grant date to the expiration date) based
on assumed rates of stock appreciation of five percent and ten percent,
compounded annually. These amounts do not represent the Company's estimate of
future stock price. Actual realizable values, if any, of stock options will
depend on the future performance of the common stock.
<TABLE>
<CAPTION>

OPTION GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------------------------

Individual Grants Potential Realizable
Value at Assumed
- ------------------------------------------------------------------------ Annual Rates
Number of % of Total of Stock Price
Shares Options Appreciation for Option
Underlying Granted to Exercise Term(/1/)
Options Employees in Price Per Expiration ------------------------
Name Granted Fiscal Year Share Date 5% 10%
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Joel N. Waller.......... -- -- -- -- -- --
David L. Rogers......... -- -- -- -- -- --
Carol S. Lund........... -- -- -- -- -- --
John Serino............. -- -- -- -- -- --
John Fowler............. 30,000(/2/) 13.69% $16.125 5/27/08 $ 304,228 $ 770,973
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) The potential realizable value is based on the term of the nonstatutory
stock options at the time of grant (ten years) and on the assumption that
the fair value of the common stock appreciates at the indicated rate for
the entire term of the option and that the option is exercised at the
exercise price and sold on the last day of its term at the appreciated
price.

(2) Represents nonstatutory stock options to purchase shares of common stock
granted on May 27, 1998 under the 1996 Option Plan. One-third of the
listed option becomes cumulatively exercisable on each of the first three
anniversaries of the date of grant. The option has a maximum term of ten
years, subject to earlier termination in the event of the optionee's
cessation of service with the Company. In the event of (i) a dissolution
or liquidation of the Company, (ii) a merger or consolidation of the
Company with or into any other entity, regardless of whether the Company
is a surviving corporation, or a proposed statutory share exchange with
any other entity, or (iii) a sale of substantially all of the assets of
the Company, the Compensation Committee may, but is not required to,
arrange for the substitution of other options for the listed options or
declare that all such options are immediately exercisable. If the
Compensation Committee makes a declaration that all such options are
immediately exercisable, then the options shall terminate at the date
specified in such declaration and the Company may, but is not required
to, pay the holder of such canceled options an amount equal to their
equity therein. Upon an event changing control of the Company (as defined
in the 1996 Option Plan), the listed options would become exercisable in
full, provided that the Compensation Committee, in its discretion, may
provide that some or all of such options will be canceled upon the change
in control and the holders of such canceled options will be paid an
amount equal to their equity therein.

11
<PAGE>

The following table summarizes option exercises during the fiscal year ended
January 30, 1999 and provides information regarding the number of all
unexercised stock options held by the Named Executive Officers as of January
30, 1999, the end of the Company's last fiscal year:

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
- -------------------------------------------------------------------------------------------------
<CAPTION>
Number of Shares
Underlying Unexercised Value of Unexercised
Options at Fiscal Year- In-the-Money Options at
Shares End Fiscal Year-End(/1/)
Acquired on Value ----------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Joel N. Waller.......... 0 $ 0 33,000 66,000 $80,454 $160,908
David L. Rogers......... 0 0 33,000 66,000 80,454 160,908
Carol S. Lund........... 0 0 30,000 0 73,140 0
John Serino............. 0 0 25,000 50,000 60,950 121,900
John Fowler............. 0 0 15,000 30,000 12,190 24,380
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated on the basis of the fair market value of the underlying shares
of common stock at January 29, 1999, the last trading day of the Company's
fiscal year, as reported by The Nasdaq National Market, of $11.188 per
share, minus the per share exercise price, multiplied by the number of
shares underlying the option. On April 1, 1999, the closing sale price of
a share of the common stock was $9.3125.

Employment Contracts

The Company has entered into the Employment Agreements with Joel Waller, as
Chairman and Chief Executive Officer, and David Rogers, as President and Chief
Operating Officer, reporting to the Board of Directors. The Employment
Agreements are identical in all material respects, except for job
responsibilities which are consistent with Messrs. Waller's and Rogers'
titles. Under the terms of the Employment Agreements, Mr. Waller and Mr.
Rogers each receives a base salary of $380,000 per year, or such higher amount
as is determined by the Board (prorated for any partial employment year). In
no event may the Board of Directors reduce Messrs. Waller's and Rogers' base
salary for any year below the greater of $380,000 or the amount of base salary
paid by the Company to Messrs. Waller and Rogers for the immediately preceding
year.

The employment of each of Mr. Waller and Mr. Rogers under their respective
Employment Agreements will end only upon termination by the Company with or
without Cause (as defined in the Employment Agreements), upon death or
Disability (as defined in the Employment Agreements), upon expiration of the
employment term on May 25, 2000 or upon resignation. Upon termination of
employment, Mr. Waller or Mr. Rogers generally will be entitled to receive his
base salary through the date of termination (or through the end of the
employment period if termination by the Company occurred without Cause or
resignation by the employee occurred with Good Reason (as defined in the
Employment Agreements)), any amounts earned but not paid under the Incentive
Plan for a completed Plan Year (as defined in the Incentive Plan) and, in
certain circumstances, a pro rated portion of his Incentive Plan payment for
the year in which termination occurs, plus continuation of certain health,
life and disability insurance benefits. The Employment Agreements also include
confidentiality and non-solicitation provisions, but do not contain any
restrictions on competition.

Compensation Committee Interlocks and Insider Participation

Lyle Berman and Thomas Brosig, directors of the Company, were members of the
Board's Compensation Committee during the last fiscal year. Mr. Berman is the
Chairman of the Board and Chief Executive Officer of Lakes Gaming and the
Chairman of the Board and Chief Executive Officer of Rainforest Cafe. Mr.
Berman was also the Chief Executive Officer of Grand Casinos until March 1998
and its Chairman of the Board until

12
<PAGE>

December 1998. Mr. Brosig is President and a director of Lakes Gaming. Mr.
Brosig was also the Chief Executive Officer, President and a director of Grand
Casinos until December 1998. Joel N. Waller, Chief Executive Officer and
Chairman of the Board of the Company, and David L. Rogers, President, Chief
Operating Officer and director of the Company, are both members of the
compensation committee of the Board of Directors of Lakes Gaming and
Rainforest Cafe. Mr. Waller and Mr. Rogers were also members of the
compensation committee of the Board of Directors of Grand Casinos until
December 1998. Effective March 5, 1999, Gary Crittenden and Marvin Goldstein
were designated by the Board of Directors as the sole members of the Board's
Compensation Committee, replacing Mr. Berman and Mr. Brosig.

13
<PAGE>

COMPARATIVE STOCK PERFORMANCE

The comparative stock performance graph below compares the cumulative
shareholder return on the common stock of the Company for the period from May
27, 1997 (the effective date of the Company's initial public offering of the
Company's common stock) through January 30, 1999 with the cumulative total
return on (i) the Nasdaq Retail Composite Stock Index and (ii) the S&P 500
Index. The table assumes the investment of $100 in the Company's common stock,
the Nasdaq Retail Composite Stock Index and the S&P 500 Index on May 27, 1997,
and the reinvestment of all dividends through the last trading day of the
years ended January 31, 1998 and January 30, 1999.

[Performance Graph]

<TABLE>
<CAPTION>
May 27, January 31, January 30,
1997 1998 1999
------- ----------- -----------
<S> <C> <C> <C>
Wilsons The Leather Experts Inc. ............... $100.00 $ 97.22 $124.31
Nasdaq Retail Composite Stock Index............. $100.00 $117.51 $143.57
S&P 500 Index................................... $100.00 $115.37 $150.60
</TABLE>

14
<PAGE>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's directors and executive officers file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission. Directors and executive officers are required to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such forms furnished to the Company and written
representations from the Company's directors and executive officers, the
Company makes the following disclosure: Mr. Goldfarb inadvertently failed to
make a timely filing of his statement of beneficial ownership with respect to
a single sale of common stock of the Company in November 1998; such filing was
made in January 1999.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company regularly conducts business with G-III of which Morris Goldfarb,
a director of the Company, is the Chief Executive Officer and Chairman of its
Board of Directors. Purchases from G-III totaled $9.4 million, $5.6 million
and $5.0 million for the fiscal years ended January 30, 1999 and January 31,
1998, and the 13-month period ended February 1, 1997, respectively. The
Company believes that transactions with G-III Apparel Group, Ltd. are on terms
no less favorable to the Company than those obtainable in arms-length
transactions with unaffiliated third parties.

PROPOSAL NUMBER TWO

APPROVAL AND ADOPTION OF THE WILSONS THE LEATHER EXPERTS INC.
EMPLOYEE STOCK PURCHASE PLAN

Introduction. Effective April 7, 1999, the Board of Directors approved,
subject to shareholder approval, the Wilsons The Leather Experts Inc. Employee
Stock Purchase Plan (the "Purchase Plan") and directed that the Purchase Plan
be submitted to a vote of the shareholders at the meeting. If approved by the
shareholders, the Purchase Plan will become effective as of the date of the
meeting. The full text of the Purchase Plan is set forth in Exhibit A to this
Proxy Statement and the following summary description is qualified in its
entirety by the full text of the Purchase Plan.

Purpose. The purpose of the Purchase Plan is to provide the employees of the
Company and its subsidiaries with an opportunity to acquire a proprietary
interest in the Company through the purchase of common stock of the Company
(the "Common Stock") and, thus, to develop a stronger incentive to work for
the continued success of the Company. The Plan is intended to be an "employee
stock purchase plan" within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code"), and shall be interpreted and
administered in a manner consistent with such intent.

Administration. The Purchase Plan will be administered by a committee of the
Board of Directors (the "Committee"). The Committee is authorized to make such
uniform rules as may be necessary to carry out the provisions of the Purchase
Plan. The Committee shall determine any questions arising in the
administration, interpretation and application of the Purchase Plan, and all
such determinations shall be conclusive and binding on all parties. The
Compensation Committee of the Board of Directors shall constitute the
Committee.

Eligibility and Number of Shares. Up to 250,000 shares of Common Stock are
available for distribution under the Purchase Plan, subject to appropriate
adjustments by the Committee in the event of certain changes in the
outstanding shares of Common Stock by reason of stock dividends, stock splits,
corporate separations, recapitalizations, mergers, consolidations,
combinations, exchanges of shares or similar transactions.

15
<PAGE>

Any employee of the Company or, subject to approval by the Board of
Directors, a parent or subsidiary corporation of the Company (including
officers and any directors who are also employees of the Company or any such
parent or subsidiary) will be eligible to participate in the Purchase Plan for
any Purchase Period so long as the employee is customarily employed at least
20 hours per week and has been employed by the Company or any such parent or
subsidiary for at least 90 consecutive days prior to the first day of the
relevant Purchase Period. "Purchase Period" means a calendar quarter or such
other period of time as may be designated by the Committee.

Any eligible employee may elect to become a participant in the Purchase Plan
for any Purchase Period by filing an enrollment form with the Company before
the first day of the Purchase Period. The election form will be effective as
of the first day of the next succeeding Purchase Period following receipt by
the Company of such enrollment form and will continue to be effective until
the employee modifies his or her authorization, withdraws from the Purchase
Plan or ceases to be eligible to participate in the Purchase Plan.

No employee may participate in the Purchase Plan if such employee would be
deemed for purposes of the Code to own stock possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company.

As of April 1, 1999, the Company had approximately 2,000 employees who would
be eligible to participate in the Purchase Plan.

Participation. An eligible employee who elects to participate in the
Purchase Plan will authorize the Company to make payroll deductions of a
specified amount of the employee's compensation. The minimum and maximum
amount that may be withheld for any week during a pay period shall be $10 and
$100, respectively (e.g., $20 and $200 respectively for a two-week pay
period). During a Purchase Period, a participant may not increase or decrease
the amount of his or her payroll deductions, but a participant may, at any
time during a Purchase Period, discontinue deductions entirely. A participant
may also elect to withdraw from the Purchase Plan during any Purchase Period,
in which event the entire balance of his or her payroll deductions during the
Purchase Period will be paid to the participant in cash within 30 days after
receipt of notice of the withdrawal by the Company. A participant who stops
payroll deductions during a Purchase Period may not thereafter resume payroll
deductions during such Purchase Period, and a participant who withdraws from
the Purchase Plan will not be eligible to reenter the Purchase Plan until the
next succeeding Purchase Period.

Amounts withheld under the Purchase Plan will be held by the Company as part
of its general assets until the end of the Purchase Period and then applied to
the purchase of Common Stock. No interest will be credited to a participant
for amounts withheld.

Purchase of Stock. Amounts deducted for a participant in the Purchase Plan
will be used to purchase Common Stock of the Company as of the last day of the
Purchase Period at a price equal to the lesser of (i) 85% of the Fair Market
Value (as defined in the Purchase Plan) of a share of Common Stock on the
first day of the Purchase Period or (ii) 85% of the Fair Market Value of a
share of Common Stock on the last day of the Purchase Period. All amounts so
deducted will be used to purchase the number of shares of Common Stock
(including fractional shares) that can be purchased with such amount, unless
the participant has properly notified the Company that he or she elects to
withdraw in cash all of such withheld amounts or to purchase a lesser number
of shares.

If purchases by all participants would exceed the number of shares of Common
Stock available for purchase under the Purchase Plan, each participant will be
allocated a ratable portion of such available shares of Common Stock. Any
amount not used to purchase shares of Common Stock will be refunded to the
participant in cash.

Certificates for the number of shares of Common Stock purchased by a
participant will be issued and delivered to him or her only upon request.

No more than 500 shares of Common Stock may be purchased by any participant
during any one Purchase Period, and no more than $25,000 in Fair Market Value
of shares of Common Stock may be purchased under the Purchase Plan and all
other employee stock purchase plans of the Company in any calendar year.

16
<PAGE>

Death, Disability, Retirement or Other Termination of Employment. If the
employment of a participant is terminated for any reason, including death,
disability or retirement, the amounts previously withheld will be applied to
the purchase of shares of Common Stock as of the last day of the Purchase
Period in which the participant's employment terminated unless the participant
has filed an appropriate form with the Company before the last day of such
Purchase Period pursuant to which the participant either elects to purchase a
specified number of shares that is less than the number that could be
purchased or elects to receive the entire credit balance in cash.

Rights Not Transferable. The rights of a participant under the Purchase Plan
are exercisable only by the participant during his or her lifetime. No right
or interest of any participant in the Purchase Plan may be sold, pledged,
assigned or transferred in any manner other than by will or the laws of
descent and distribution.

Amendment or Modification. The Board of Directors may at any time amend the
Purchase Plan in any respect that will not adversely affect the rights of
participants pursuant to shares of Common Stock previously acquired under the
Purchase Plan, provided that approval by the shareholders of the Company is
required to (i) increase the number of shares of Common Stock to be reserved
under the Purchase Plan (except for adjustments by reason of stock dividends,
stock splits, corporate separations, recapitalizations, mergers,
consolidations, combinations, exchanges of shares or similar transactions), or
(ii) change the designation of corporations whose employees may be eligible to
participate in the Purchase Plan.

Termination. All rights of participants under the Purchase Plan will
terminate at the earlier of (i) the day that participants become entitled to
purchase a number of shares of Common Stock equal to or greater than the
number of shares of Common Stock remaining available for purchase, or (ii) at
any time, at the discretion of the Board of Directors, upon at least seven
days notice to the participants. Upon termination of the Purchase Plan, the
Company will pay to each participant cash in an amount equal to the balance
previously withheld from the participant and, because of an election by the
participant, not used to purchase Common Stock.

Federal Tax Considerations. Payroll deductions under the Purchase Plan will
be made after taxes. Participants will not recognize any additional income as
a result of participation in the Purchase Plan until the disposal of shares of
Common Stock acquired under the Purchase Plan or the death of the participant.
Participants who hold their shares of Common Stock for more than twenty-one
months or die while holding their shares of Common Stock will recognize
ordinary income in the year of disposition or death equal to the lesser of (i)
the excess of the fair market value of the shares of Common Stock on the date
of disposition or death over the purchase price paid by the participant or
(ii) 15% of the fair market value of the shares of Common Stock on the first
day of the Purchase Period as of which the shares were purchased. If the
twenty-one month holding period has been satisfied when the participant sells
the shares of Common Stock or if the participant dies while holding the shares
of Common Stock, the Company will not be entitled to any deduction in
connection with the disposition of such shares by the participant.

Participants who dispose of their shares of Common Stock within twenty-one
months after the shares of Common Stock were purchased will be considered to
have realized ordinary income in the year of disposition in an amount equal to
the excess of the fair market value of the shares of Common Stock on the date
they were purchased by the participant over the purchase price paid by the
participant. If such dispositions occur, the Company generally will be
entitled to a deduction at the same time and in the same amount as the
participants who make those dispositions are deemed to have realized ordinary
income.

Participants will have a basis in their shares of Common Stock equal to the
purchase price of their shares of Common Stock plus any amount that must be
treated as ordinary income at the time of disposition of the shares of Common
Stock, as explained above. Any additional gain or loss realized on the
disposition of shares of Common Stock acquired under the Purchase Plan will be
capital gain or loss.

New Plan Benefits. No shares of Common Stock have yet been issued pursuant
to the Purchase Plan. On April 1, 1999, the closing sale price of a share of
Common Stock on The Nasdaq National Market was $9.3125.

17
<PAGE>

Voting Requirements

The affirmative vote of the holders of a majority of the outstanding shares
of common stock of the Company present in person or represented by proxy and
entitled to vote on approving and adopting the Purchase Plan is required to
approve and adopt the Purchase Plan. A shareholder voting through proxy who
abstains with respect to this matter is considered to be present and entitled
to vote, and is in effect casting a negative vote, but a shareholder
(including a broker) who does not give authority to a proxy to vote, or
withholds authority to vote, on the approval and adoption of the Purchase Plan
is not considered present and entitled to vote on this matter.

Voting Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE
EMPLOYEE STOCK PURCHASE PLAN.

PROPOSAL NUMBER THREE
APPOINTMENT OF AUDITORS

Arthur Andersen LLP, independent public accountants, have been the auditors
for the Company since May 1996. Upon recommendation of the Audit Committee,
the Board of Directors has selected Arthur Andersen LLP to serve as the
Company's auditors for the fiscal year ending January 29, 2000, subject to
ratification by the shareholders. While it is not required to do so, the Board
of Directors is submitting the selection of that firm for ratification in
order to ascertain the view of the shareholders. If the selection is not
ratified, the Board of Directors will reconsider its selection.

A representative of Arthur Andersen LLP will be present at the meeting and
will be afforded an opportunity to make a statement if such representative so
desires and will be available to respond to appropriate questions during the
meeting.

Voting Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF ARTHUR ANDERSEN
LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JANUARY 29,
2000.

ADDITIONAL MATTERS

Annual Report

The Annual Report to Shareholders of the Company for the fiscal year ended
January 30, 1999, which includes the Annual Report on Form 10-K and financial
statements, is being mailed with this Proxy Statement.

Deadline for Submission of Shareholders' Proposals

Proposals of shareholders intended to be presented at the 2000 Annual
Meeting of Shareholders and desired to be included in the Company's Proxy
Statement and form of proxy for such meeting must be received by the Assistant
Secretary of the Company, 7401 Boone Avenue North, Brooklyn Park, Minnesota
55428, no later than December 19, 1999 for inclusion in the Proxy Statement
for that meeting. If notice of any other shareholder proposals intended to be
presented at the 2000 Annual Meeting of Shareholders but not intended to be
included in the Company's Proxy Statement and form of proxy for such meeting
is not received by the Company at least 50 days prior to such meeting (i.e.,
March 29, 2000, assuming the 2000 Annual Meeting of Shareholders will be held
May 18, 2000), the proxy solicited by the Board of Directors of the Company
for use in connection with that meeting may confer authority on the proxies
named therein to vote in their discretion on such proposal without any
discussion in the Company's Proxy Statement for that meeting of either the
proposal or how such

18
<PAGE>

proxies intend to exercise their voting discretion; provided, however, that in
the event that the Company gives less than 60 days' notice or prior public
disclosure to shareholders of the date of the 2000 Annual Meeting of
Shareholders, such proxy may confer such authority unless notice of such
proposal is received by the Company not later than the close of business on
the tenth day following the day on which such notice of the date of the 2000
Annual Meeting of Shareholders is mailed or such public disclosure is made.
The Company suggests that all such proposals be sent to the Company by
certified mail, return receipt requested.

Other Matters

As of the date of this Proxy Statement, management knows of no matters that
will be presented for determination at the Annual Meeting other than those
referred to herein. If any other matters properly come before the annual
meeting calling for a vote of shareholders, it is intended that the shares
represented by the proxies solicited by the Board of Directors will be voted
by the persons named therein in accordance with their best judgment, subject
to applicable federal securities rules.

By Order of the Board of Directors,

/s/ Philip S. Garon

Philip S. Garon
Secretary

Dated: April 19, 1999

19
<PAGE>

EXHIBIT A

WILSONS THE LEATHER EXPERTS INC.
EMPLOYEE STOCK PURCHASE PLAN

1. Purpose and Scope of Plan. The purpose of this Wilsons The Leather
Experts Inc. Employee Stock Purchase Plan (the "Plan") is to provide the
employees of Wilsons The Leather Experts Inc. (the "Company") and its
subsidiaries with an opportunity to acquire a proprietary interest in the
Company through the purchase of its common stock and, thus, to develop a
stronger incentive to work for the continued success of the Company. The Plan
is intended to be an "employee stock purchase plan" within the meaning of
Section 423(b) of the Internal Revenue Code of 1986, as amended, and shall be
interpreted and administered in a manner consistent with such intent.

2. Definitions.

2.1. The terms defined in this section are used (and capitalized)
elsewhere in this Plan:

(a) "Affiliate" means each domestic or foreign corporation that is a
"parent corporation" or "subsidiary corporation" of the Company, as
defined in Sections 424(e) and 424(f) of the Code or any successor
provision and whose participation in the Plan the Board of Directors
has expressly approved.

(b) "Board of Directors" means the Board of Directors of the Company.

(d) "Committee" means two or more Disinterested Persons designated by
the Board of Directors to administer the Plan under Section 13.

(e) "Common Stock" means the $.01 par value common stock of the
Company.

(f) "Company" means Wilsons The Leather Experts Inc., a Minnesota
corporation.

(g) "Compensation" means the gross cash compensation (including wage,
salary, commission, bonus, and overtime earnings) paid by the Company
or any Affiliate to a Participant in accordance with the terms of
employment.

(h) "Disinterested Persons" means a member of the Board of Directors
who is considered a disinterested person within the meaning of Exchange
Act Rule 16b-3 or any successor definition.

(i) "Eligible Associate" means any employee of the Company or an
Affiliate whose customary employment is at least 20 hours per week and
who has been employed by the Company or an Affiliate for at least 90
consecutive days prior to the first day of the relevant Purchase
Period; provided, however, that "Eligible Associate" shall not include
any person who would be deemed, for purposes of Section 423(b)(3) of
the Code, to own stock possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company.

(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.

(k) "Fair Market Value" of a share of Common Stock as of any date
means, if the Company's Common Stock is listed on a national securities
exchange or quoted on the NASDAQ National Market, the mean between the
high and low sale prices for such Common Stock on such exchange or
National Market on said date, or, if no sale has been made on such
exchange or National Market on said date, on the last preceding day on
which any sale shall have been made. If such determination of Fair
Market Value is not consistent with the then current regulations of the
Secretary of the Treasury applicable to plans intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423(b) of
the Code, however, Fair Market Value shall be determined in accordance
with such regulations. The determination of Fair Market Value shall be
subject to adjustment as provided in Section 14.

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(l) "Participant" means an Eligible Associate who has elected to
participate in the Plan in the manner set forth in Section 4.

(m) "Plan" means this Wilsons The Leather Experts Inc. Employee Stock
Purchase Plan, as amended from time to time.

(n) "Purchase Period" means a calendar quarter or such other period
of time as may be adopted by the Committee.

(o) "Recordkeeping Account" means the account maintained in the books
and records of the Company recording the amount withheld from each
Participant through payroll deductions made under the Plan.

3. Scope of the Plan. The total number of shares of Common Stock available
for sale under this Plan shall not exceed 250,000 (subject to adjustment as
provided in Section 14). All sales of shares of Common Stock pursuant to this
Plan shall be subject to the same terms, conditions, rights and privileges.
These shares may consist, in whole or in part, of authorized but unissued
Common Stock not reserved for any other purpose.

4. Eligibility and Participation. To be eligible to participate in the Plan
for a given Purchase Period, an employee must be an Eligible Associate on the
first day of such Purchase Period. An Eligible Associate may elect to
participate in the Plan by filing an enrollment form with the Company before
the first day of such Purchase Period that authorizes regular payroll
deductions from Compensation beginning with the first payday in the Purchase
Period and continuing until the Eligible Associate withdraws from the Plan,
modifies his or her authorization, or ceases to be an Eligible Associate, as
hereinafter provided.

5. Amount of Common Stock Each Eligible Associate May Purchase.

5.1. Subject to the provisions of this Plan, each Eligible Associate
shall be offered the right to purchase on the last day of the Purchase
Period the maximum number of shares of Common Stock (including fractional
shares) that can be purchased at the price specified in Section 5.2 with
the entire credit balance in the Participant's Recordkeeping Account;
provided, however, that (i) no more than 500 shares of Common Stock may be
purchased under the Plan by any Participant for a given Purchase Period and
(ii) no more than $25,000 in Fair Market Value (determined at the beginning
of each Purchase Period) of shares of Common Stock may be purchased under
the Plan and all other employee stock purchase plans, if any, of the
Company and the Affiliates by any Participant for each calendar year. If
the purchases by all Participants would otherwise cause the aggregate
number of shares of Common Stock to be sold under the Plan to exceed the
number specified in Section 3, however, each Participant shall be allocated
a ratable portion of the maximum number of shares of Common Stock which may
be sold.

5.2. The purchase price of each share of Common Stock sold pursuant to
this Plan will be the lesser of (a) or (b) below:

(a) 85% of the Fair Market Value of such share on the first day of
the Purchase Period.

(b) 85% of the Fair Market Value of such share on the last day of the
Purchase Period.

6. Method of Participation.

6.1. The Company shall give notice to each Eligible Associate of the
opportunity to purchase shares of Common Stock pursuant to this Plan and
the terms and conditions for such offering. Such notice is subject to
revision by the Company at any time prior to the date of purchase of such
shares. The Company contemplates that for tax purposes the first day of a
Purchase Period will be the date of the offering of such shares.

6.2. Each Eligible Associate who desires to participate in the Plan for a
Purchase Period shall signify his or her election to do so by signing an
election form developed by the Committee. Such election form will authorize
the Company to withhold a portion of the Eligible Associate's Compensation
paid for a

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regular pay period. The minimum and maximum amount that may be withheld for
any week during a pay period shall be $10 and $100, respectively (e.g., $20
and $200, respectively, for a two-week pay period). An election to
participate in the Plan and to authorize payroll deductions as described
herein must be made before the first day of a Purchase Period. The election
shall be effective for the first pay period in the Purchase Period
immediately following the filing of such election form and shall remain in
effect unless and until the Plan is terminated or such Participant
withdraws from the Plan, modifies his or her authorization, or ceases to be
an Eligible Associate, as hereinafter provided.

7. Recordkeeping Account.

7.1. The Company shall maintain a Recordkeeping Account for each
Participant. Payroll deductions pursuant to Section 6 will be credited to
such Recordkeeping Accounts on each payday.

7.2. No interest will be credited to a Participant's Recordkeeping
Account.

7.3. The Recordkeeping Account is established solely for accounting
purposes, and all amounts credited to the Recordkeeping Account will remain
part of the general assets of the Company.

7.4. A Participant may not make any separate cash payment into the
Recordkeeping Account.

8. Right to Adjust Participation or to Withdraw.

8.1. A Participant may, at any time during a Purchase Period, direct the
Company to make no further deductions from his or her Compensation. Upon
such action, future payroll deductions with respect to such Participant
shall cease. Any Participant who stops payroll deductions during a Purchase
Period may not thereafter resume payroll deductions during such Purchase
Period.

8.2 Except as otherwise provided in Section 8.1 with respect to cessation
of deductions, any Participant who wishes to increase or decrease the
deductions from his or her Compensation may do so only as of the first pay
period in a Purchase Period.

8.3. At any time before the end of a Purchase Period, any Participant may
withdraw from the Plan. In such event, all future payroll deductions shall
cease and the entire credit balance in the Participant's Recordkeeping
Account will be paid to the Participant, without interest, in cash within
30 days. A Participant who withdraws from the Plan will not be eligible to
reenter the Plan until the next succeeding Purchase Period.

8.4. Notification of a Participant's election to increase, decrease, or
terminate deductions, or to withdraw from the Plan, shall be made by filing
an appropriate form with the Company.

9. Termination of Employment. If the employment of a Participant is
terminated for any reason, including without limitation death, disability, or
retirement, the entire balance in the Participant's Recordkeeping Account will
be applied to the purchase of shares as provided in Section 10.1 as of the
last day of the Purchase Period in which the Participant's employment
terminated.

10. Purchase of Shares.

10.1. As of the last day of the Purchase Period, the entire credit
balance in each Participant's Recordkeeping Account will be used to
purchase shares (including fractional shares) of Common Stock (subject to
the limitations of Section 5) unless the Participant has filed an
appropriate form with the Company in advance of that date (which either
elects to purchase a specified number of shares which is less than the
number described above or elects to receive the entire credit balance in
cash). Any amount in a Participant's Recordkeeping Account that is not used
to purchase shares pursuant to this Section 10.1 will be refunded to the
Participant.

10.2. Promptly after the end of each Purchase Period, a certificate for
the number of shares of Common Stock purchased by all Participants shall be
issued and delivered to an agent selected by the Company. The agent will
hold such certificate for the benefit of all Participants who have
purchased shares

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of Common Stock and will maintain an account for each Participant
reflecting the number of shares (including fractional shares) credited to
the account of each Participant. Each Participant will be entitled to
direct the voting of all shares credited to such Participant's account by
the agent. At any time, a Participant may request from the agent a
certificate representing the shares of Common Stock credited to the
Participant's account, in which case the agent shall transfer a certificate
for such shares directly to the Participant; provided, however, that the
agent shall not be required to issue a certificate representing a
fractional share and may instead pay the Participant a cash amount
representing the fair market value of such fractional share.

11. Rights as a Shareholder. A Participant shall not be entitled to any of
the rights or privileges of a shareholder of the Company with respect to such
shares, including the right to vote or direct the voting or to receive any
dividends that may be declared by the Company, until (i) the Participant
actually has paid the purchase price for such shares and (ii) certificates for
such shares have been issued either to the agent or to the Participant, both
as provided in Section 10.

12. Rights Not Transferable. A Participant's rights under this Plan are
exercisable only by the Participant during his or her lifetime, and may not be
sold, pledged, assigned or transferred in any manner other than by will or the
laws of descent and distribution. Any attempt to sell, pledge, assign or
transfer the same shall be null and void and without effect. The amounts
credited to a Recordkeeping Account may not be assigned, transferred, pledged
or hypothecated in any way, and any attempted assignment, transfer, pledge,
hypothecation or other disposition of such amounts will be null and void and
without effect.

13. Administration of the Plan. This Plan shall be administered by the
Committee, which is authorized to make such uniform rules as may be necessary
to carry out its provisions. The Committee shall determine any questions
arising in the administration, interpretation and application of this Plan,
and all such determinations shall be conclusive and binding on all parties.

14. Adjustment upon Changes in Capitalization. In the event of any change in
the Common Stock of the Company by reason of stock dividends, split-ups,
corporate separations, recapitalizations, mergers, consolidations,
combinations, exchanges of shares and the like, the aggregate number and class
of shares available under this Plan and the number, class and purchase price
of shares available but not yet purchased under this Plan may be adjusted
appropriately by the Committee.

15. Amendment of Plan. The Board of Directors may at any time amend this
Plan in any respect which shall not adversely affect the rights of
Participants pursuant to shares previously acquired under the Plan, except
that, without shareholder approval no amendment shall be made to (a) increase
the number of shares reserved under this Plan or (b) change the designation of
corporations whose employees may be eligible to participate in the Plan.

16. Effective Date of Plan. This Plan shall be effective upon approval
thereof by the shareholders of the Company. All rights of Participants in any
offering hereunder shall terminate at the earlier of (i) the day that
Participants become entitled to purchase a number of shares of Common Stock
equal to or greater than the number of shares remaining available for purchase
or (ii) at the discretion of the Board of Directors at any time following
seven days' notice to Participants. Upon termination of this Plan, shares of
Common Stock shall be issued to Participants in accordance with Section 10,
and cash, if any, remaining in the Participants' Recordkeeping Accounts shall
be refunded to them, as if the Plan were terminated at the end of a Purchase
Period.

17. Governmental Regulations and Listing. All rights granted or to be
granted to Eligible Associates under this Plan are expressly subject to all
applicable laws and regulations and to the approval of all governmental
authorities required in connection with the authorization, issuance, sale or
transfer of the shares of Common Stock reserved for this Plan, including,
without limitation, there being a current registration statement of the
Company under the Securities Act of 1933, as amended, covering the shares of
Common Stock purchasable on

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the last day of the Purchase Period applicable to such shares, and if such a
registration statement shall not then be effective, the term of such Purchase
Period shall be extended until the first business day after the effective date
of such a registration statement, or post-effective amendment thereto. If
applicable, all such rights hereunder are also similarly subject to
effectiveness of an appropriate listing application to a national securities
exchange or a national market system, covering the shares of Common Stock
under the Plan upon official notice of issuance.

18. Miscellaneous.

18.1. This Plan shall not be deemed to constitute a contract of
employment between the Company and any Participant, nor shall it interfere
with the right of the Company to terminate any Participant and treat him or
her without regard to the effect which such treatment might have upon him
or her under this Plan.

18.2. Wherever appropriate as used herein, the masculine gender may be
read as the feminine gender, the feminine gender may be read as the
masculine gender, the singular may be read as the plural and the plural may
be read as the singular.

18.3. This Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Minnesota.

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[WILSONS THE LEATHER EXPERTS LOGO]

-- Please detach here --
- --------------------------------------------------------------------------------

The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.

1.Election of directors:
01 Lyle Berman [_] Vote FOR all [_] Vote WITHHELD for
02 Thomas J. Brosig nominees (except all nominees
03 Gary L. Crittenden as marked to the
04 Morris Goldfarb contrary below)
05 Marvin W. Goldstein
06 David L. Rogers
07 Joel N. Waller

(Instructions: To withhold -----------------------------
authority to vote for any indicated
nominee, write the number(s) of the
nominee(s) in the box provided to -----------------------------
the right.)

[_] For [_] Against [_] Abstain
2. Approval and adoption of the Wilsons
The Leather Experts Inc. Employee
Stock Purchase Plan.

[_] For [_] Against [_] Abstain
3. Ratification of the appointment of
Arthur Andersen LLP as the
independent public accountants of the
Company for the fiscal year ending
January 29, 2000.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR EACH ITEM. THE PROXIES ARE AUTHORIZED TO
VOTE IN THEIR DISCRETION WITH RESPECT TO OTHER MATTERS WHICH MAY PROPERLY COME
BEFORE THE MEETING.

Address Change? Mark Box [_] Date ______________
Indicate changes below:

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

Signature(s) in Box

Please sign exactly as your name(s)
appear(s) on the Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc., should
include title and authority.
Corporations should provide the full
name of corporation and title of
authorized officer signing the Proxy.

<PAGE>

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[WILSONS THE LEATHER EXPERTS LOGO]

ANNUAL MEETING

Tuesday, May 18, 1999
10:00 a.m. Central Daylight Time

The Northland Inn
7025 Northland Drive
Brooklyn Park, Minnesota

Wilsons The Leather Experts Inc.
7401 Boone Avenue North, Brooklyn Park, MN 55428 Proxy

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

This Proxy is solicited on behalf of the Board of Directors.

By signing this proxy, you revoke all prior proxies and appoint Joel N. Waller
and David L. Rogers, or either one of them, as Proxies, each with the power to
appoint his substitute and to act without the other, and authorize each of
them to represent and to vote, as designated herein, all shares of common
stock of Wilsons The Leather Experts Inc. (the "Company") held of record by
the undersigned on April 9, 1999, at the Annual Meeting of Shareholders of the
Company to be held on May 18, 1999 or at any adjournment thereof.

If no choice is specified, the proxy will be voted "FOR" Items 1, 2 and 3.

See reverse for voting instructions.