Trans World Entertainment Receives Bankruptcy Court Approval for the Asset Acquisition of Musicland Holding Corp.

ALBANY, N.Y., March 22 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC), a leading retailer of entertainment products,
announced today that the United States Bankruptcy Court for the Southern
District of New York has approved the Company’s bid to acquire substantially
all of the assets of Musicland Holding Corp. Musicland, an entertainment
specialty retailer which operates retail stores and websites under the names
Sam Goody (SamGoody.com), Suncoast Motion Picture Company (Suncoast.com), On
Cue and MediaPlay.com, filed a voluntary petition to restructure under Chapter
11 of the United States Bankruptcy Code in January 2006. The transaction is
scheduled to close on March 27, 2006 and represents total consideration of
$104.2 million in cash and $18.1 million in assumed liabilities.

“We are pleased that the Bankruptcy Court has approved our purchase of
Musicland’s assets and look forward to quickly and efficiently integrating the
acquired stores into the Trans World chain,” said Robert J. Higgins, Chairman
And Chief Executive Officer of Trans World Entertainment. “This acquisition
will increase our national footprint providing important operational and
marketing synergies and we believe the acquisition will be accretive to our
2006 results. We also expect to leverage Musicland’s investments in its
Replay customer loyalty program that has become a model in customer
relationship management for its millions of Replay members across the
country.”

Musicland owns and operates 400 specialty music retail stores located
throughout the United States. Trans World expects to retain 335 of
Musicland’s best performing stores and liquidate the remaining 65 stores
through a joint venture with Hilco Merchant Resources, LLC.

Trans World Entertainment is a leading specialty retailer of music, video
and video game products. The Company operates approximately 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

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