Trans World Entertainment Completes Asset Acquisition of Musicland Holding Corp.

Company Increases Revolving Credit Facility with Bank of America to
$130 Million

ALBANY, N.Y., March 29 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC), a leading retailer of entertainment products,
announced today it has completed the acquisition of 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. As previously announced,
the transaction represents total consideration of $104.2 million in cash and
$18.1 million in assumed liabilities.

Trans World also announced that it has amended its revolving secured
credit agreement with Bank of America, N.A., increasing the facility to $130
million. The Company entered into the original $100 million facility in
January 2006.

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, Puerto Rico
and e-commerce sites, 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. In addition to its mall locations, operated
under the f.y.e., Sam Goody and Suncoast brands, the Company also operates
freestanding locations under the names Coconuts Music and Movies, Strawberries
Music, Wherehouse, Sam Goody, On Cue, 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 of MWW Group,
+1-201-507-9500, [email protected],
for Trans World Entertainment Corporation