Trans World Entertainment Provides Updated Guidance for Second Quarter and Fiscal 2005

ALBANY, N.Y., July 7, 2005 /PRNewswire-FirstCall via COMTEX/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced that it expects to report a decline
in comparable store sales in the low single digits for the second fiscal
quarter. The Company had previously disclosed that it expected positive
comparable store sales for the period. For the second fiscal quarter, the
Company expects a net loss of $0.15 – $0.20 per share compared to a net loss
of $0.10 last year. The Company expects earnings of $0.80 – $0.85 per share
for the year compared to the previously disclosed range of $0.85 – $0.90 per
share.

“After positive comparable store sales in May, our sales softened in June
and we expect the softness to continue through the end of the second quarter,
reflecting delays in a number of key music releases and lower than expected
sales of DVD new releases,” said Robert J. Higgins, Chairman and Chief
Executive Officer of Trans World Entertainment. “We were particularly
disappointed with sales in the music and DVD categories for the Father’s Day
holiday. However, we continue to see positive trends in video game and
accessory sales.”

“We expect our business to improve in the second half and are committed to
delivering increased earnings for the year. Our plans to implement our third
generation listening and viewing stations, or LVS 3, are on track as well as
plans to roll out Backstage Pass, our customer reward program. We are
positioned to realize our longer-term outlook, which remains positive, as we
implement these new customer-focused programs,” Mr. Higgins concluded.

Trans World Entertainment will host a teleconference call for members of
the financial community on Thursday, August 11, 2005 at 10:00 AM ET to discuss
its second quarter earnings release, which will be issued on the same day
before the market opens. The 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 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 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; or Richard Tauberman of MWW Group, ,
+1-201-507-9500, for Trans World Entertainment