8-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 21, 2009

TRANS WORLD ENTERTAINMENT CORPORATION
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(Exact name of registrant as specified in its charter)

New York	0-14818	14-1541629
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(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	identification No.)
38 Corporate Circle, Albany, New York		12203
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(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (518) 452-1242

None

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(Former name or former address, if changed since last report.)

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On May 21, 2009, Trans World Entertainment Corporation issued a press release announcing its financial results for its fiscal first quarter ended May 2, 2009.A copy of Trans World Entertainment Corporation’s press release is furnished with this report as Exhibit 99.1, and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K is being furnished under Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

ITEM 7.01. REGULATION FD DISCLOSURE

Attached hereto as Exhibit 99.2 is the transcript for the earnings conference call of Trans World Entertainment Corporation held on May 21, 2009. The information in this Current Report on Form 8-K, including the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibit attached hereto, shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Certain information contained in this Current Report on Form 8-K, including information in Exhibit 99.2 hereto, is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning results of operations and Trans World Entertainment Corporation’s strategies. Trans World Entertainment Corporation cautions that there are factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Trans World Entertainment Corporation; accordingly, there can be no assurance that such suggested results will be realized. For a list of Trans World Entertainment Corporation’s risk factors, see the Company’s Annual Filing on Form 10-K with the Securities and Exchange Commission for the year ended January 31, 2009.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

      (c) EXHIBITS. The following are furnished as Exhibits to this Report:

Exhibit No. ---------	Description ------------------
99.1	Trans World Entertainment Corporation Press Release dated May 21, 2009.
99.2	Trans World Entertainment Corporation Transcript for Earnings Call held on May 21, 2009.

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TRANS WORLD ENTERTAINMENT CORPORATION
Date:May 26, 2009	/s/ John J. Sullivan
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	Executive Vice President-Finance,
	Chief Financial Officer and Secretary

EXHIBIT INDEX

Exhibit No. ---------	Description ------------------
99.1	Trans World Entertainment Corporation Press Release dated May 21, 2009.
99.2	Trans World Entertainment Corporation Transcript of Earnings Call held on May 21, 2009.

EX-99.1

EX-99.1

		Contact: Trans World Entertainment John J. Sullivan EVP, Chief Financial Officer (518) 452-1242	Contact: Financial Relations Board Marilynn Meek (mmeek@frbir.com) (212) 827-3773
	38 Corporate Circle Albany, NY 12203

    www.twec.com NEWS RELEASE

TRANS WORLD ENTERTAINMENT ANNOUNCES FIRST QUARTER RESULTS

     Albany, NY, May 21, 2009 -- Trans World Entertainment Corporation (Nasdaq: TWMC) today reported financial results for its first quarter ended May 2, 2009. For the first quarter of 2009, the Company recorded a net loss of $13.7 million, or $0.44 per share compared to a net loss of $11.8 million or $0.38 per share for the same period last year. Last year’s results include a $3.1 million gain from the sale of the Company’s distribution center facility in Canton, Ohio.

     For the first quarter, total sales decreased 18% to $191.4 million compared to $232.6 million in 2008. Comparable store sales for the quarter decreased 9%. During the quarter, the Company operated an average of 709 stores compared to 806 stores last year, a 12% decline.

     Gross profit for the quarter was $65.8 million or 34.3% of sales as compared to $83.0 million or 35.7% of sales for the same period last year. The reduction in gross profit as a percentage of sales was due to lower vendor allowances this year versus last year.

     Selling, general and administrative expenses for the quarter were $75.7 million, a 14.3% reduction from $88.3 million in the comparable period last year. SG&A expenses were 39.5% of sales versus 39.3% of sales for the same period last year, excluding the gain on the sale of the distribution facility. The gain on the sale of the distribution facility last year had a favorable impact on SG&A as a percentage of sales of 130 basis points.

     The Company had $29.0 million in borrowings outstanding on its credit facility at the end of the quarter as compared to $22.7 million last year. Inventory was $332.7 million, or $74 per square foot, at the end of the quarter versus $417.0 million or $83 per square foot at the end of last year.

     Trans World will host a teleconference call today, Thursday, May 21, 2009, at 10:00 AM ET to discuss its financial results. Interested parties can listen to the simultaneous webcast on the Company’s corporate website, www.twec.com.

     Trans World Entertainment is a leading specialty retailer of entertainment software, including music, video and video games and related products. The Company operates retail stores in the United States, the District of Columbia, the U.S. Virgin Islands, and Puerto Rico, primarily under the names f.y.e. for your entertainment and Suncoast and on the web at www.fye.com, www.wherehouse.com, www.secondspin.com, www.samgoody.com and 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.

— table to follow —

TRANS WORLD ENTERTAINMENT CORPORATION
Financial Results

STATEMENTS OF OPERATIONS:
(in millions, except per share data)

	Thirteen Weeks Ended					Thirteen Weeks Ended
	May 2,			% to		May 3,			% to
	2009			Sales		2008			Sales
Net sales	$	191.4				$	232.6
Cost of sales		125.6		65.7	%		149.6		64.3	%
Gross profit		65.8		34.3	%		83.0		35.7	%
Selling, general and
administrative expenses		75.7		39.5	%		88.3		38.0	%
Depreciation and amortization		3.7		1.9	%		5.5		2.4	%
Loss from operations		(13.6	)	-7.1	%		(10.8	)	-4.7	%
Interest expense, net		0.7		0.4	%		0.9		0.3	%
Loss before income taxes		(14.3	)	-7.5	%		(11.7	)	-5.0	%
Income tax (benefit) expense		(0.6	)	-0.3	%		0.1		0.1	%
NET LOSS	$	(13.7	)	-7.2	%	$	(11.8	)	-5.1	%
Basic and diluted loss per share:
Basic and diluted loss per share	$	(0.44	)			$	(0.38	)
Weighted average number of
common shares outstanding - basic and diluted		31.3					31.2
SELECTED BALANCE SHEET CAPTIONS:
(in millions, except store data)
	May 2, 2009					May 3, 2008
Cash and cash equivalents	$	8.2				$	13.1
Merchandise inventory		332.7					417.0
Fixed assets (net)		47.6					75.3
Accounts payable		89.3					128.1
Borrowings under line of credit		29.0					22.7
Long-term debt, less current portion		7.9					11.7
Stores in operation		704					799

2

EX-99.2

EX-99.2

Trans World Entertainment

Moderator: Rich Tauberman
May 21, 2009
10:00 AM ET

Operator:	Good day, ladies and gentlemen. Welcome to the Trans World Entertainment First Quarter conference call. At this time, our participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will be given at that time. If anyone should require assistance during the call, please press * then 0 on your Touch-Tone telephone. As a reminder, this conference call is being recorded. I would like to introduce your host for today’s call, Mr. Bob Higgins, Chairperson and CEO of Trans World Entertainment. Sir, you may begin.
Bob Higgins:	Thank you very much. Good morning. On the call with me today are Jim Litwak, our President and Chief Operating Officer, and John Sullivan, our Chief Financial Officer. Thank you for joining us today as we discuss our first quarter results. We’ll take questions following our comments. Total sales in the first quarter decreased 18% to $191 million. Comp store sales decreased 9%. For the quarter, the company recorded a net loss of $13.7 million, or $0.44 per share, compared to a net loss of $11.8 million, or $0.38 per share, for the same period last year. John will now take you through some of the highlights for the quarter.
John Sullivan:	Thank you, Bob. Good morning. As Bob mentioned, our net loss for the quarter was $13.7 million or $0.44 per share. Last year our net loss of $11.8 million or $0.38 per share. Last year’s results include a $3.1 million gain related to the sale of our former distribution facility in Canton, Ohio. Our gross margin rate for the quarter decreased to 34.3% from 35.7% last year. The reduction in gross profit as a percentage of sales was due to lower vendor allowances this year. SG&A expenses were $75.7 million, a reduction of 14.3% and a sales decline of 17.7%, resulting in an increase as a percentage of sales from 38% last year to 39.5% this year.

As mentioned earlier, during last year’s first quarter, the company sold its Canton distribution facility for $6.3 million, resulting in a net gain of $3.1 million, which was included in SG&A expenses and favorably impacted the SG&A rate to sales last year by 130 basis points. When adjusted for the gain last year, our operating expenses in the quarter were down 17.2% on the sales decline of 17.7% . Reducing expenses in relation to sales is a constant focus. EBITDA was a loss of $9.9 million in the quarter versus the loss of $8.4 million last year, excluding the gain. Net interest expense was $700,000 in the quarter, $200,000 less than the $900,000 last year. The decrease is due to lower interest rates on our credit facility. We ended the quarter with borrowings under our line of credit of $29 million compared to $23 million last year. Year over year, we have lowered our inventory by $84 million. Our quarter end inventory position was $333 million versus last year’s $417 million. On a square foot basis, this was $74 a foot versus $83 last year. Despite our operating results, we’ve been able to maintain a strong balance sheet as evidenced by our current ratio of 2.3 to 1. During the quarter, we closed eight stores and did not open any new stores. We ended the quarter with 704 stores in operation and square feet totaling $4.5 million versus last year’s 799 stores and square feet totaling $5.0 million. Jim will now provide you further detail on our sales by category.

Jim Litwak:

Thank you, John. Good morning. Our overall comp Q1-- our overall Q1 comp decline of 9% was driven by declines in all of our categories. Music was down 13% on a comp basis with the top 50 down 9% for the quarter. The music category represented 36% of our business for the quarter, down from 37% last year. For the quarter, the industry was down 19%. Video sales decreased 4% on a comparable basis. Comp sales in our top 50 declined 4% during the quarter. Video now represents 43% of our business, up from 41% last year. For the quarter, the industry was down 12%. Strong promotions and the performance of Twilight helped us outperform the industry. Blu-ray continues to perform below expectations, both ours and the industry’s, due to a slower than expected penetration of Blu-ray hardware and the higher price points on catalog titles. Blu-ray new releases, however, have been a bright spot within the category. Despite operating 12% fewer stores than last year, we were able to increase our market share in video and maintain our market share in music.

	Comparable stores sales in our game category decreased 13% and represented 8% of our business, the same as last year. Our top 50 for games decreased 5% on a comp basis. For the quarter, the industry was down 8%, and our market share decreased slightly. Comparable store sales for electronics, accessories, and trend decreased 11% on a combined basis and represented 13% of our business in the quarter versus 14% last year. I will now turn it back to Bob to complete our comments.
Bob Higgins:	Thank you, Jim. We continue to operate in a challenging environment. However, we have taken positive steps in the first quarter. Our focus in managing through this down cycle is by generating cash through working capital and managing expenses until our sales improve. We’re working on a number of initiatives to improve sales, and will be in a position to discuss them later in the year. Our balance sheet remains strong as evidenced by our current ratio and our low borrowings under our line of credit. During the first quarter, we’re able to reduce our expenses in line with our sales decline, and we remain very flexible with our portfolio of stores with half of our stores’ leases expiring at the end of this year. I’d now like to open the call up for any questions, Operator.
Operator:	If you have a question at this time, please press the 1 key on your Touch-Tone telephone. If your question has been answered and you wish to remove yourself from the queue, please press the # key. One moment please. I’m not showing any questions at this time, Sir.
Bob Higgins:	Okay, Operator. Well I’d like to thank everyone for your time this morning. I look forward to talk to you when we announce our second quarter results. Thank you very much.
Operator:	Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You all may disconnect and have a wonderful day.