Trans World Entertainment Enters Into Purchase and Sale Agreement With Musicland Holding Corp.

Agreement is Subject to Bankruptcy Court Approval and Competitive Bidding Process

Feb 21, 2006 /PRNewswire-FirstCall via COMTEX News Network/ — Trans World Entertainment
Corporation (Nasdaq: TWMC), announced today that it has entered into a
purchase and sale agreement with Musicland Holding Corp., an entertainment
specialty retailer, which operates retail stores and online under the names
Sam Goody (SamGoody.com), Suncoast Motion Picture Company (Suncoast.com) and
MediaPlay.com. The agreement with Musicland, which filed a voluntary petition
to restructure under Chapter 11 of the United States Bankruptcy Code in
January 2006, is subject to a competitive bidding process and approval by the
United States Bankruptcy Court for the Southern District of New York.

“We believe that the acquisition of Musicland’s assets will allow us to
leverage their store locations, strategically increase Trans World’s national
footprint, and will provide further growth opportunities,” said Robert J.
Higgins, Chairman and Chief Executive Officer of Trans World Entertainment.

“We are committed to maximizing the value of our assets and believe that a
sale to Trans World is in the best interests of our associates, creditors,
suppliers and customers,” said Michael J. Madden, President and Chief
Executive Officer of Musicland Holding Corporation.

Trans World also announced that it will host a teleconference call for
members of the financial community on Thursday, March 9, 2006 at 10:00 a.m.
EST to discuss a press release, which will be issued on the same day before
the market opens, regarding its fourth quarter and fiscal year 2005 results.
This call will be simultaneously webcast at the Company’s website,
http://www.twec.com.

Trans World Entertainment is a leading specialty retailer of music, video
and video game products. The Company operates nearly 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 FYE brand, the Company also
operates freestanding locations under the names Coconuts Music and Movies,
Strawberries Music, Wherehouse, CD World, Spec’s, Second Spin 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

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