Trans World Entertainment Announces Third Quarter 2007 Results

"We continued to achieve positive comparable store sales in home video,video games, electronics and boutique during the third quarter, however, theseresults did not offset the decline in music," said Robert J. Higgins, Chairmanand Chief Executive Officer of Trans World Entertainment. "Our third quartercomparable store sales results did, however, show improvement over the firsttwo quarters of 2007."

Gross profit as a percentage of sales for the third quarter of 2007 was35.1% versus 36.6% in the third quarter of 2006. SG&A as a percentage ofsales was 40.8% compared to 40.4% last year.

Sales for the thirty-nine week period ended November 3, 2007 decreased 8%to $814.2 million, compared to $884.5 million in 2006. Comparable store salesfor the thirty-nine week period decreased 7%. Net loss for the thirty-nineweek period was $33.4 million or $1.08 per share. Loss before extraordinarygain in 2006 was $31.5 million or $1.02 per share. The net loss after theextraordinary gain was $26.2 million, or $0.85 per share, in 2006.

Trans World Entertainment is a leading specialty retailer of entertainmentsoftware, including music, home video and video games and related products.The Company operates over 950 retail stores in the United States, the Districtof Columbia, the U.S. Virgin Islands, and Puerto Rico, primarily under thenames f.y.e. for your entertainment and Suncoast and on the web at, , , and.

Certain statements in this release set forth management's intentions,plans, beliefs, expectations or predictions of the future based on currentfacts and analyses. Actual results may differ materially from those indicatedin such statements. Additional information on factors that may affect thebusiness and financial results of the Company can be found in filings of theCompany with the Securities and Exchange Commission.

                    TRANS WORLD ENTERTAINMENT CORPORATION                              Financial Results    INCOME STATEMENTS:    (in millions, except per share data)                                                 Thirteen Weeks Ended                                        November 3, % to  October 28,  % to                                            2007    Sales    2006      Sales    Sales                                  $260.6           $297.7    Cost of sales                           169.3   64.9%    188.9   63.4%    Gross profit                             91.3   35.1%    108.8   36.6%    Selling, general and     administrative expenses                106.3   40.8%    120.2   40.4%    Depreciation and amortization             8.9    3.5%      9.8    3.3%    Loss from operations                    (23.9)  -9.2%    (21.2)  -7.1%    Other income                                -      -      (0.1)     -    Interest expense                          1.9    0.7%      1.7    0.6%    Loss before income taxes and     extraordinary gain - unallocated     negative goodwill                      (25.8)  -9.9%    (22.8)  -7.7%    Income tax benefit                      (11.5)  -4.4%     (9.5)  -3.2%    Loss before extraordinary gain -     unallocated negative goodwill          (14.3)  -5.5%    (13.3)  -4.5%    Extraordinary gain - unallocated     negative goodwill, net of     income taxes                               -      -       1.9    0.6%    NET LOSS                               $(14.3)  -5.5%   $(11.4)  -3.9%    Basic and diluted loss per     common share:    Loss per share before extraordinary     gain - unallocated negative goodwill  $(0.46)          $(0.43)    Extraordinary gain - unallocated     negative goodwill, net of     income taxes                               -             0.06    Basic and diluted loss per     common share                          $(0.46)          $(0.37)    Weighted average number of     common shares outstanding -      basic and diluted                      31.1             30.8    SELECTED BALANCE SHEET CAPTIONS:    (in millions, except store data)    Cash and cash equivalents    Merchandise inventory    Fixed assets (net)    Accounts payable    Borrowings under line of credit    Long-term debt, less current portion    Stores in operation    INCOME STATEMENTS:    (in millions, except per share data)                                              Thirty-nine Weeks Ended                                        November 3, % to  October 28,  % to                                            2007    Sales    2006      Sales    Sales                                  $814.2           $884.5    Cost of sales                           520.5   63.9%    569.0   64.3%    Gross profit                            293.7   36.1%    315.5   35.7%    Selling, general and     administrative expenses                321.5   39.5%    345.5   39.1%    Depreciation and amortization            27.3    3.4%     27.5    3.1%    Loss from operations                    (55.1)  -6.8%    (57.5)  -6.5%    Other income                             (0.1)     -      (4.0)  -0.5%    Interest expense                          5.2    0.6%      4.1    0.5%    Loss before income taxes and     extraordinary gain -     unallocated negative goodwill          (60.2)  -7.4%    (57.6)  -6.5%    Income tax benefit                      (26.8)  -3.3%    (26.1)  -3.0%    Loss before extraordinary gain -    unallocated negative goodwill           (33.4)  -4.1%    (31.5)  -3.5%    Extraordinary gain - unallocated     negative goodwill, net of     income taxes                               -      -       5.3    0.6%    NET LOSS                               $(33.4)  -4.1%   $(26.2)  -2.9%    Basic and diluted loss per     common share:    Loss per share before extraordinary     gain - unallocated negative goodwill  $(1.08)          $(1.02)    Extraordinary gain - unallocated     negative goodwill, net of     income taxes                               -             0.17    Basic and diluted loss per     common share                          $(1.08)          $(0.85)    Weighted average number of     common shares outstanding -     basic and diluted                       31.0             30.8    SELECTED BALANCE SHEET CAPTIONS:     November 3,      October 28,    (in millions, except store data)         2007             2006    Cash and cash equivalents               $15.5            $13.5    Merchandise inventory                   569.1            656.2    Fixed assets (net)                      119.9            134.7    Accounts payable                        264.6            333.7    Borrowings under line of credit          81.8             71.6    Long-term debt, less current portion     13.5             16.9    Stores in operation                       962            1,121