Trans World Entertainment Announces New Credit Agreement

ALBANY, N.Y., Jan. 10 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced that on January 5, 2006 the Company
entered into a new five year, $100 million revolving secured credit facility
agreement with Bank of America, N.A. The new facility replaces the Company’s
previous facility and will provide for general corporate purposes. Currently,
the Company has no loans outstanding on either the new or previous facility.

“Our new credit agreement provides a reduced interest rate, lower costs
and other positive terms suitable to our business. It underscores the
financial strength of Trans World Entertainment and helps ensure the ability
to fund our strategic initiatives, as needed,” commented John Sullivan,
Executive Vice President and Chief Financial Officer. “We are also pleased to
have a strong, new financial partner in Bank of America.”

Trans World Entertainment is a leading specialty retailer of music, video
and video game products. The Company operates about 800 retail stores in 46
states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and
e-commerce sites, http://www.fye.com, http://www.coconuts.com,
http://www.wherehouse.com and http://www.secondspin.com. In addition to its
mall locations, operated primarily under the f.y.e brand, the Company also
operates freestanding locations under the names Coconuts Music and Movies,
Strawberries Music, Wherehouse, CD World, Spec’s, Second Spin, Streetside
Records, and Planet Music.

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.

SOURCE Trans World Entertainment Corporation

CONTACT:
John J. Sullivan, EVP, Chief Financial Officer of Trans World
Entertainment,
+1-518-452-1242 ext. 7400; or
Rich Tauberman of MWW Group for
Trans World Entertainment,
+1-201-507-9500, r