Trans World Entertainment Corporation Reports Limited and Conditional Actions by Special Committee to Permit Robert J. Higgins to Form Bid Consortium

ALBANY, N.Y., Nov. 20 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (“Trans World Entertainment” or “the Company”) (Nasdaq: TWMC)
announced today actions by the Special Committee of the Board of Directors to
permit the Company’s largest shareholder and Chairman and Chief Executive
Officer, Robert J. Higgins, to work with prospective co-investors in
connection with his nonbinding expression of interest, announced on November
9, 2007, to acquire outstanding shares of the Company that Mr. Higgins and his
related persons and entities do not own. At this time, Mr. Higgins and his
related persons and entities hold approximately 40% of the issued and
outstanding shares of the Company. Riley Investment Management LLC, who filed
a Statement of Beneficial Ownership on Schedule 13D indicating beneficial
ownership of approximately 11.9% of the issued and outstanding shares of the
Company, is among the potential co-investors with whom Mr. Higgins has
indicated he intends to consider working.

Mr. Higgins’ preliminary proposal contemplates an offer to pay the
Company’s shareholders $5.00 per share in cash. The proposal is subject to
Mr. Higgins being able to arrange financing. Mr. Higgins has also made clear,
and today’s actions by the Special Committee require, that this proposal and
any successor proposal by Mr. Higgins or his consortium will be subject to the
approval of the Board of Directors, upon the recommendation of the Special
Committee, and the negotiation and execution of definitive documentation with
the Special Committee, acting on behalf of Company.

The preliminary proposal was made to, and with the permission of, a
Special Committee of non-management members of the Board of Directors formed
in connection with the Company’s ongoing exploration of strategic alternatives
to enhance shareholder value. The Special Committee, with the assistance of
its financial advisor, Goldman, Sachs & Co., has been actively exploring
strategic alternatives, including the sale of the Company, since May 2007.

The Special Committee has neither reached a view on the advisability of
this proposal by Mr. Higgins nor undertaken any obligation to negotiate
exclusively with Mr. Higgins or his prospective consortium. The actions
announced today merely provide that Mr. Higgins may expand his bid consortium
to include Mr. Riley and others without prematurely triggering events that
would render it unfeasible for there to be any future negotiated transaction
with Mr. Higgins’ prospective consortium. Specifically, the Special Committee
granted a limited and conditional waiver under Section 912 of the New York
Business Corporations Act and the Company’s Shareholders Rights Plan, in each
case to permit Mr. Higgins to create a consortium exclusively for purposes of
proposing a transaction in the near-term to the Special Committee that would
be subject to the approval of the Board of Directors upon the recommendation
of the Special Committee.

The Special Committee, in consultation with its advisors, will review and
evaluate Mr. Higgins’ proposal, any successor proposals by Mr. Higgins or his
prospective consortium, and any alternative proposals submitted by third
parties to Goldman Sachs. The Special Committee, in consultation with its
advisors, expects that it will review and evaluate information and data in
connection with this exercise and may become engaged in negotiations and
discussions with Mr. Higgins, his prospective consortium, and any third
parties who may submit proposals. Trans World Entertainment does not intend
to comment further on these matters until the Special Committee and the Board
of Directors have completed all negotiations and discussions relevant to this
and any related or successor proposals that Mr. Higgins and his prospective
consortium may make, as well as any alternative proposals by third parties.
Against this background, shareholders are urged to take into account that
there is no assurance that an agreement between Mr. Higgins, his prospective
consortium or any third party, on the one hand, and the Board of Directors or
the Special Committee, on the other hand, will be achieved and there may be
additional disclosure forthcoming in the future that is relevant to these
matters.

Trans World Entertainment is a leading specialty retailer of entertainment
software, including music, home video and video games and related products.
The Company operates over 950 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 the Company’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,
Trans World
Entertainment,
+1-518-452-1242;
or
Peter Gau,
MWW Group,
+1-201-964-2377,