Trans World Entertainment Announces First Quarter 2008 Results

ALBANY, N.Y., May 22 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced total sales for the first quarter
ended May 3, 2008 decreased 19% to $232.6 million, compared to $286.3 million
in the first quarter of 2007. Comparable store sales in the first quarter of
2008 decreased 6%. For the first quarter of 2008, the loss before income
taxes was $11.7 million compared to a loss before income taxes of $15.8
million for the same period last year. For the first quarter of 2008, the
net loss was $11.8 million, or $0.38 per share compared to a net loss of $9.1
million, or $0.29 per share for the same period last year. The Company
recorded income tax expense of $0.1 million during the first quarter of 2008,
compared to an income tax benefit of $6.7 million last year.

“Overall retail sales were weak in the first quarter. While comp sales in
music continued to decline, we experienced increases in video, video games and
our other category which includes electronics, accessories and trend,” said
Robert J. Higgins, Chairman and Chief Executive Officer of Trans World
Entertainment.

Gross profit as a percentage of sales for the first quarter of 2008 was
35.7% compared to 36.5% in the first quarter of 2007. SG&A as a percentage of
sales decreased to 38.0%, compared to 38.3% last year.

Trans World Entertainment is a leading specialty retailer of entertainment
software, including music, video and video games and related products. The
Company operates nearly 800 retail stores in the United States, the District
of Columbia, the U.S. Virgin Islands, and Puerto Rico, primarily under the
names f.y.e. for your entertainment and Suncoast and on the web at
www.fye.com, www.wherehouse.com, www.secondspin.com, www.samgoody.com and
www.suncoast.com.

Certain statements in this release set forth management’s intentions,
plans, beliefs, expectations or predictions of the future based on current
facts and analyses. Actual results may differ materially from those indicated
in such statements. Additional information on factors that may affect the
business and financial results of the Company can be found in filings of the
Company with the Securities and Exchange Commission.



                     TRANS WORLD ENTERTAINMENT CORPORATION
                               Financial Results


    STATEMENTS OF OPERATIONS:
    (in millions, except per share data)

                                 Thirteen Weeks Ended   Thirteen Weeks Ended
                                    May 3,    % to         May 5,    % to
                                    2008     Sales         2007     Sales

    Net sales                      $232.6                 $286.3

    Cost of sales                   149.6     64.3%        181.9     63.5%
    Gross profit                     83.0     35.7%        104.4     36.5%

    Selling, general and
     administrative expenses         88.3     38.0%        109.6     38.3%

    Depreciation and amortization     5.5      2.4%          9.2      3.2%
    Loss from operations            (10.8)    -4.7%        (14.4)    -5.0%

    Interest expense, net             0.9      0.3%          1.4      0.5%

    Loss before income taxes        (11.7)    -5.0%        (15.8)    -5.5%
    Income tax expense (benefit)      0.1      0.1%         (6.7)    -2.3%

    NET LOSS                       $(11.8)    -5.1%        $(9.1)    -3.2%

    Basic and diluted loss
     per share:

    Basic and diluted loss
     per share                     $(0.38)                $(0.29)

    Weighted average number of
     common shares outstanding
     - basic and diluted             31.2                   31.0



    SELECTED BALANCE SHEET CAPTIONS:
    (in millions, except store data)
                                                 May 3, 2008       May 5, 2007

    Cash and cash equivalents                        $13.1             $13.7
    Merchandise inventory                            417.0             494.7
    Fixed assets (net)                                75.3             131.2
    Accounts payable                                 128.1             171.1
    Borrowings under line of credit                   22.7              55.0
    Long-term debt, less current portion              11.7              15.2

    Stores in operation                                799               972

SOURCE Trans World Entertainment Corporation

CONTACT:
John J. Sullivan, EVP, Chief Financial Officer of Trans World
Entertainment
+1-518-452-1242
or
Richard Tauberman of MWW Group
+1-201-507-9500

for Trans World Entertainment

Web site: http://www.twec.com