Trans World Entertainment Reports a 6% Decline in Comparable Store Sales for the 2006 Holiday Season

ALBANY, N.Y., Jan. 3 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today reported a comparable store sales decrease of
6% for the five-week period ended December 30, 2006. For the nine-week period
ended December 30, 2006, comparable store sales decreased 5%. Total sales for
the five-week period increased 23% to $348 million compared to $284 million
for the same period last year. Total sales for the nine-week period were $469
million compared to $380 million for the same period last year, an increase of
23%. The Company operated 1,113 stores this year compared to 798 stores last
year.

“Sales for the holiday season were below our expectations,” commented
Robert J. Higgins, Chairman and Chief Executive Officer of Trans World
Entertainment. “As a result, we expect to report lower earnings for fiscal
2006 in a range of flat to $0.05 per share compared to our previously
disclosed range of $0.10 to $0.20 per share.”

For the eleven-month period ended December 30, 2006, comparable store
sales decreased 6%. Total sales for the period increased 17% to $1.353
billion compared to $1.160 billion during the same period last year.

Trans World will host a teleconference call today, Wednesday, January 3,
2007, at 10:00 AM ET to discuss its holiday sales results. Interested parties
can listen to the simultaneous webcast on the Company’s corporate website,
http://www.twec.com.

Trans World Entertainment is a leading specialty retailer of music, video
and video game products. The Company operates over 1,100 retail stores in the
United States, the District of Columbia, the U.S. Virgin Islands, and Puerto
Rico under various brands. The Company is in the process of consolidating the
majority of its stores (Coconuts Music and Movies, Strawberries Music,
Wherehouse, Sam Goody and Spec’s) under the name f.y.e. for your
entertainment. The Company also operates over 180 video only stores primarily
under the Suncoast brand and on the web at http://www.fye.com,
http://www.coconuts.com, http://www.wherehouse.com, http://www.secondspin.com,
http://www.samgoody.com and http://www.suncoast.com.

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 Corporation
+1-518-452-1242, ext. 7400

Rich Tauberman of
MWW Group
+1-201-507-9500

for Trans World Entertainment
Corporation