IT'S A TRANS WORLD AFTER ALL

Trans World Entertainment Corporation announced today that the U.S. Bankruptcy Court for the Southern District of New York has approved its bid to acquire the assets of Musicland Holding Corp., which will make it the leading, and last, major operator of mall-based music retail stores in the country.

Musicland operates retail outlets under the names Sam Goody, Suncoast Motion Picture Company, On Cue and MediaPlay.com, filed a voluntary petition to restructure under Chapter 11 last January. The transaction, valued at $104.2 million in cash and $18.1 million in assumed liabilities, is scheduled to close on March 27.

Trans World Chairman/CEO Robert Higgins said: "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. 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."

Trans World expects to retain 335 of Musicland's best performing stores and liquidate the remaining 65 stores of a total of 400 through a joint venture with Hilco Merchant Resources, LLC. Added to its current total of 800, that give them 1,135 stores around the country.

Trans World Entertainment currently operates retail stores in 46 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and e-commerce sites. 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.