In marketing we kicked off our first-ever branding campaign in two markets in July, Albany, New York and Harrisburg, Pennsylvania. While it is too early to discuss sales levels in these markets versus the chain, the campaign has already made a positive impact on brand awareness among our target customer.
In operations we made adjustments to our staffing model during the quarter to maximize customer service levels and minimize unnecessary payroll investment. This will result in $2 million in savings, which we expect to realize over the next 12 months.
Finally, as part of our digital strategy, earlier this month we launched our first-ever MP3 digital download kiosk by a national retailer in the US in two of our stores with our proprietary Mix & Burn technology with plans to expand the technology to 40 stores this fall. This technology is unique in that we can now support downloading to virtually all MP3 devices, including iPods in-store and now offer over two million tracks from all major labels and independents.
Customers downloading content through our digital kiosk will be able to listen to their tracks instantly on their portable devices, as well as store a backup copy by way of their home or office PCs. These are just some of the initiatives we are undertaking to reposition our business and complete our transition to the preferred destination for all things entertainment.
While this process has taken longer than expected, in part due to the industry conditions, we have the experience, leadership and balance sheet necessary to overcome the challenges that we face today. Our balance sheet remains strong, and our revolver balance is well below last year with over $100 million available on our line.
As we look towards the balance of the year, we remain comfortable with our annual guidance for a mid-single-digit comp decline and a total sales decline of 17% with EBITDA in the range of $5 million to $10 million. I would now like to open up the call for any questions. Christopher, could you give the instructions, please?
(Operator Instructions) Edward Woo, Wedbush.
I just had some clarifying questions or housekeeping. The comps for music was minus 17%. Video, did you say it was plus 1% and video games, was it plus 10%? And electronics, others was it plus 6%?
Video games was minus 10%.
Minus 10%. Then percentage of total revenue was music 39%, video 39%, video games 8% and others 14%?
That's correct.
Edward Woo - Wedbush Morgan - AnalystAnd then on the video games side, do you anticipate additional negative comps going forward, particularly with the launch of, I guess, Halo last year? And what are you seeing in terms of hardware situation, particularly with Nintendo?
Jim Litwak - Trans World Entertainment Corp. - President and COOWe anticipate that the game business will improve over the course of the balance of the year. We think hardware allocations will get a little bit better as we go into the fourth quarter. That should benefit us more, particularly as we are up against -- as more of the stores that we close we're no longer up against in terms of the 600 stores now being at the 400 stores. So we see improvement there.
And I know Halo was a pretty big title last year, but there is a lot of good stuff coming for the balance of the year, particularly that sort of fit into the music category, between Guitar Hero and Rock Band, that we think we should be able to capitalize on. So we feel more favorable in regards to where the game business is going for the second half of the year.
Edward Woo - Wedbush Morgan - AnalystWhat about your outlook for upcoming music titles or DVDs, movies?
Jim Litwak - Trans World Entertainment Corp. - President and COOFor the music side we think that there is actually two things working in our favor there. We see the catalog business getting -- continuing to get better. When I say better, a lesser decline than it had been trending due to the remixing that we've done.
In regards to the new releases, the new releases in the third quarter look better than they did in the second quarter, and I will tell you that the new releases, from what we are hearing -- and obviously not everything is confirmed yet -- but the new releases in the fourth quarter in music look absolutely terrific and far superior to last year. Last year there were only four titles that really had -- that resonated at all with the consumer, and it was Jay-Z, Alicia Keys, Mary J. Blige and Josh Groban's Christmas album.
From what we are hearing now, there is a lot of great stuff that is going to be available for Q4, whether it is Black Eyed Peas, Jay-Z, Eminem, U2, Beyonce, Dr. Dre, Hinder, 50 Cent. So it looks really very, very powerful. So we feel pretty good in regards to where the music new releases are going.
In regards to DVD, DVD for third quarter looks pretty good, certainly much better than how it did in Q2 when we got hurt on the new release side. Q4 is going to be the interesting one, Ed. We are up against a lot of big titles last year, some really big volume ones. When we look at the number of good titles that so far are coming out for Q4 for this year, actually the number looks to be a little bit bigger than last year in terms of titles, but the titles themselves may not resonate as high.
But understand something; we thought the titles last year were going to be fantastic. We thought we were going to have a great DVD Q4 with all the new releases, and it was our weakest quarter. So, frankly, I think we feel pretty good about where the new releases are this year, but we feel even better about what we are going to be able to do with catalog for Q4.
Edward Woo - Wedbush Morgan - AnalystOkay. Thank you.
OperatorIan Corydon, B. Riley & Co.
Ian Corydon - B. Riley & Co. - AnalystOn the other merchandise, could you just talk about what is working or not working there and what you are doing to drive that business for the rest of the year?
Jim Litwak - Trans World Entertainment Corp. - President and COOOur boutique area, which we call Trend, which is posters and all the fun things you see going on in terms of posters and T-shirts and figurines and other product along those lines, that continues to do exceptionally well. We think that that is going to continue to have just an explosive business for the balance of the year. So that is really what is driving it.
We see that MP4 and some MP3s will be an important part of the electronics business. We will continue to work on developing the mobile piece of the business. And the other part is all the stuff that you put these in, all the accessories that they go in, that has been showing some really good growth for us. So we feel bullish about that, too.
Ian Corydon - B. Riley & Co. - AnalystOkay, and on the music side could you just talk about the re-merchandising you did and did that help you in the second quarter, or is that helping so far in the third quarter?
Jim Litwak - Trans World Entertainment Corp. - President and COOIt really helped us at the tail end of the second quarter, meaning July. What we did was we really looked at what our sales performance had been on a SKU-by-SKU basis, on a store-by-store basis the last six months. And we adjusted our mix accordingly on that store-by-store basis, as well as expanding secondary and tertiary genres. So those two things combined, it brought in a lot of new product into the stores. And we saw terrific results, big improvement in the catalog performance in the month of July, and it is continuing on. And frankly, we are still -- today we are still about one third of the way -- we still have about one third of the open orders left to receive. So that should really be complete, I would think, by the end of September, and we realize that very well for Q4.
Ian Corydon - B. Riley & Co. - AnalystAnd last questions on expenses. I think Bob mentioned a couple million in cost savings. I missed what that was from, and are there any other initiatives to take cost out the rest of the year?
Bob Higgins - Trans World Entertainment Corp. - Chairman and CEOOn that one, Ian, that was totally related to the stores and the structure at the store level. And that $2 million will be over the next 12 months, so that really -- that project is being completed by the end of September. So the best way to look at it would be a $2 million savings going forward. But John, you might want to touch on some of the other expense areas.
John Sullivan - Trans World Entertainment Corp. - EVP, CFO and SecretaryWe continue to focus on cutting costs and improving efficiencies across the company. We are constantly monitoring our variable expenses. The one that Bob talked about is probably one key initiative. We are improving our occupancy expenses. We are always looking to lower the corporate overhead and lowering distribution freight costs. So that is a constant focus and effort on our part as we try to align the expense structure in line with the sales trends.
OperatorMr. Corydon, did that conclude your question, sir?
Ian Corydon - B. Riley & Co. - AnalystYes, thanks.
OperatorMr. Higgins, I am showing no further questions in queue. I would like to turn the presentation back over to you, sir.
Bob Higgins - Trans World Entertainment Corp. - Chairman and CEOOkay. Thank you very much, Christopher. I would like to thank everybody for their time this morning. We look forward to talking to you again in November with our third-quarter results, and we look forward to seeing you then. Thank you very much. Thank you, Christopher.
OperatorYou are welcome, sir. Ladies and gentlemen, today's earnings conference has been recorded and will be made available for replay. To access the replay please dial 888-266-2081 or 703-925-2533 if you are dialing internationally, and enter the replay code 1272520. Again, to access the replay please dial 888-266-2081 or 703-925-2533 and enter the access code 1272520. This concludes today's conference. We again thank you for your participation. You may now disconnect at this time. Good day.
