Trans World Entertainment Provides Updated Guidance For Fiscal 2005

ALBANY, N.Y., Oct. 18 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced that it expects to report lower
earnings for fiscal 2005 than previously announced. The Company expects
earnings of $0.25 – $0.30 per share for the year compared to the previously
disclosed range of $0.65 – $0.70 per share. For the third fiscal quarter, the
Company expects a net loss of $0.33 – $0.38 per share compared to a net loss
of $0.14 per share last year. Last year’s net loss included an extraordinary
gain of $0.6 million, net of taxes, or $0.01 per share related to the
acquisition of the Wherehouse Entertainment Stores in 2003. Comparable store
sales for the third fiscal quarter are expected to decline between 6% and 7%.

“Sales for the quarter have been affected by a general weakness in music
and DVD sales and the lack of strong new releases. At the same time our gross
margin has been impacted by the increasingly competitive environment for music
and DVD,” commented Robert J. Higgins, Chairman and Chief Executive Officer of
Trans World.

“Due to the current environment, we are being more cautious about consumer
spending and expect comparable store sales in the fourth quarter to decline in
the mid single-digit range,” Mr. Higgins added. “We remain committed to
implementing our customer focused programs including the LVS 3, our third
generation listening and viewing stations, and the recently completed roll out
of Backstage Pass, our customer reward program,” he concluded.

Trans World Entertainment is a leading specialty retailer of music, video
and video game products. The Company operates over 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 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
Trans World Entertainment
+1-518-452-1242; or
Richard Tauberman
MWW Group
+1-201-507-9500