Amid the continued plunge in U.S. physical music sales, Trans World Entertainment hasn't had a profitable quarter since the three months that ended Feb. 1, 2007. But thanks to the company's efforts to reduce operating expenses and close unprofitable stores, the Albany, N.Y., retail chain could finally return to the black in its fourth fiscal quarter that ends Feb. 1, 2010.

During the company's annual employee conference in mid-September, Trans World chairman/CEO Bob Higgins struck a positive tone, saying he expects business to improve, citing what he sees as a promising slate of new releases. Higgins also touted the success of the company's recent pricing experiment in 54 of its stores, where it is selling every CD for $9.99. Industry sources say the pricing experiment, which has secured the participation of Universal Music Group, Sony Music Entertainment and EMI Music, has helped more than double unit sales in those locations.

Of course, the sales gains in those stores are...

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