Trans World Entertainment Comments on Earnings Outlook for Third Quarter

ALBANY, N.Y., Oct. 11 /PRNewswire/ —
Trans World Entertainment Corporation (Nasdaq: TWMC) today announced that
management expects to report a wider than anticipated net loss for the third
fiscal quarter of 2001.

Reflective of a difficult retail environment and a slowdown in sales after
the September 11 tragedies, Trans World expects to report a net loss of
between $(0.25) and $(0.30) per share for the third fiscal quarter, with
comparable store sales approximately equal to that of last year’s third fiscal
quarter.

“Our third quarter comparable store sales had been trending positively
prior to the tragic events of September 11, and we are seeing a stabilizing of
sales in October. We remain optimistic in our ability to report positive
comparable store sales growth for the fourth quarter,” said Robert J. Higgins,
Chairman and Chief Executive Officer of Trans World.

In addition, management noted continued progress in the Company’s
roll-out of the FYE brand and eWorks technology initiative to Trans World’s
730 mall-based specialty stores and its web site. This roll-out, which will
enable the Company to convert browsers to buyers, increase average sales
transaction and increase customer closure rate, is expected to be accretive to
2002 net earnings.

Trans World Entertainment is a leading specialty retailer of music and
video products. The Company operates retail stores in 46 states, the District
of Columbia, the U.S. Virgin Islands, Puerto Rico and an e-commerce site,
http://www.twec.com. Mall locations include FYE, Camelot, Record Town, The
Wall, Disc Jockey and Saturday Matinee. Freestanding locations include
Coconuts Music and Movies, Strawberries Music, Spec’s 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 Sullivan, Chief Financial Officer of Trans World
Entertainment Corporation, +1-518-452-1242, ext. 7400; or Michael Lendener,
Investor Relations Counsel, The MWW Group, +1-212-704-9727, ,
for Trans World Entertainment Corporation/