Child World
Child World was an American chain of toy stores founded by Sid Shneider and Joseph Arnesano in Quincy, Massachusetts, in 1962. Child World once had 182 stores and revenues of approximately $830 million annually. From 1977 until its closure Child World also operated the Children's Palace chain of stores after acquiring it from Kobacker Stores, and later incorporated most of the aesthetic design features from the latter chain into Child World stores.
 | |
| Corporation | |
| Industry | Retail |
| Fate | Liquidation |
| Founded | 1962 |
| Defunct | September 12, 1992 |
| Headquarters | Avon, Massachusetts |
| Products | Toys, electronics, board games, dolls, and video games |
| Website | None |
History
Beginnings and early expansion
Child World was founded by Sid Shneider and Joseph Arnesano in Quincy, Massachusetts, in 1962. It became a publicly-traded corporation in 1968 based in Avon, Massachusetts.[1]
After the acquisition of Children's Palace in 1975,[2] Child World became the second largest toy retailer in the United States after Toys "R" Us, its chief competitor. In many areas Child World stores were operated near Toys "R" Us locations.
Child World also began incorporating elements of the Children's Palace store design into its stores that opened post-merger, with many of the new stores taking on a castle-like design (see image at right). In 1981 the chain became a subsidiary of Cole National Corporation, a retail ownership group that is now a division of Kohlberg Kravis Roberts.[3]
Until 1990, Child World was led by then-President Peter Hayes. The chain was known for, largely, a 'warehouse' style of merchandising, with long aisles and so-called "over-stock" storage above selling-floor-level shelves.
Although sales had begun to decline by the late 1980s, in 1989 the chain announced a new 29,000 sq ft (2,700 m2) store prototype designed to appeal to customers and real estate developers alike. The first store remodeled into the new prototype was in Framingham, Massachusetts, near the Shoppers World mall and key competitor Toys "R" Us, just one block away. Initially, the prototype was well-received, with strong first-day openings, and good performance in the critical Christmas selling season. Owing partly to that success, Child World management announced that the new prototype would be used to renovate 11 existing sites, and new market expansion would be targeted in 1990, 1991 and 1992 using the new design. However, Child World would not have the chance to implement the design, as problems began to arise.
Downfall
While the focus of Child World's management was primarily on growing the brand, their fortunes would take a turn for the worse beginning in 1990. That year, Peter Hayes and a large portion of his fellow executives were fired from the company. This was followed by a July 1990 recession that lasted until the following March and left customers with less disposable income. Also, unlike in past years, there were no toy lines deemed "must haves" that could bring crowds into Child World and Children's Palace stores the way crazes like Cabbage Patch Kids and Teddy Ruxpin did in the 1980s.
The biggest issue facing Child World was not the downturn in the economy and its effect on business. Instead it was a decision by Cole National to begin restricting the amount of capital they were providing to the stores, which consequently resulted in the company being unable to pay its bills. Vendors such as LEGO responded by refusing to accept orders for new merchandise from Child World, which left stores unable to maintain fully stocked shelves. Its profile was not helped by Toys "R" Us' continued growth, as well as the chain's being named a co-defendant in a lawsuit filed by the Consumer Products Safety Commission.[3]
Child World ended fiscal year 1990 with US$830 million in assets, but carried over US$1 billion in liabilities and the final figures showed a deficit of US$192 million. With no improvement in sight, Cole National began fielding offers for the ailing chain and was about to strike a US$157 million deal with an unnamed buyer, but the deal fell through when the buyer failed to come up with enough capital and no further interest in Child World emerged as the company's financial problems continued to accelerate. Cole National was forced to perform a debt trade with another venture capital firm, Avon Investment Limited Partnership, in 1991 in order to divest itself of the collapsing toy store chain. Cole National gave Avon $30 million in short-term debt in exchange for a larger amount of long-term debt and the remainder of the short-term debt. Avon installed a group of former Toys "R" Us executives who sought to revive Child World, but nothing changed and as 1992 began, the company was forced to close 26 stores and leave certain markets where they underperformed.[3]
Bankruptcy, failed merger, and liquidation
In April 1992, Child World lost its line of credit and was forced to file for Chapter 11 bankruptcy protection as a result. In the discovery phase of the case, findings by the presiding judge led a group of former Child World managers and Cole National executives to file a class-action lawsuit against Avon, accusing Avon of deliberately sabotaging the company so they could liquidate it and thus not pay them what they were owed. On May 7, 1992, Child World went public with its bankruptcy filing.[4] 54 more stores were targeted for closure as Child World chose to focus its business on its Northeastern United States stores, which were still profitable at the time. They also began to seek new sources of credit with the plan being to keep the remaining 71 stores open for the remainder of 1992 and all of 1993 as Child World worked to get itself out of bankruptcy.[1]
However, Child World's attempt to secure a new line of credit was met with opposition from banks that were unwilling to help the company as it continued to post heavy quarterly losses. [1] With the company's financial state growing more and more tenuous by the day, Avon turned to Lionel Corporation for help. Lionel ran their own toy store chain, Lionel Kiddie City, at the time and they were also in significant financial trouble, having just gone through a major downsizing of its own in 1992.[4] Avon and Lionel began negotiations to merge their struggling businesses, with Child World stating that they were otherwise out of options and would not be able to survive if the proposed merger were to fail. A deadline was set for July 12, 1992, but talks would continue beyond that. While the two sides negotiated, a massive inventory clearance sale was launched on July 1 at all 71 Child World locations in an effort to raise cash.
On August 2, Child World announced the failure of the merger talks and would immediately begin winding down business. The subsequent liquidation of the 71 Child World locations took approximately six weeks to complete.[4]
Child World's potential merger partner eventually would fall victim to liquidation as well, as Lionel Kiddie City went out of business one year later.
Store design
Child World was known largely for making its stores resemble castles, complete with turrets, battlements, and three arches (two small, one large) in the front door.[5] The corporate logo was written in a "refrigerator magnet"-like typeface. The design started showing up in newer Child World stores after the 1977 acquisition of Children's Palace. After the company went out of business some of the retailers that took over the Child World spaces retained the design but most did not.
Mascot
The mascot for Child World was originally a cartoon rabbit named Happy Rabbit who sported the words "I'm Happy" on his T-shirt. He was later replaced by a cartoon panda bear named Peter Panda, often depicted wearing overalls with his name printed on them.
Video catalog
In 1990, Child World produced a video catalog in time for Christmas that year called "Video Toy Chest: A Toy Catalog on Videotape". This catalog advertised the toys sold, with child actors talking about the toys, including Sega and Nintendo video game consoles and software. Two of the child actors/actresses featured in the video were J.D. Daniels and Lacey Chabert.[6]
In popular culture
A Child World store that stood at 7600 West Roosevelt Road in Forest Park, Illinois (since demolished), was used in Martin Scorsese's 1986 film The Color of Money as the place where Vincent Lauria (Tom Cruise) worked as a toy-store clerk, and where retired pool hustler "Fast Eddie" Felson (Paul Newman) came to see him to convince him to be his protégé in pool.[7][8]
References
- Bryant, Adam (May 8, 1992). "Child World Files for Bankruptcy". The New York Times. Retrieved 2007-11-30.
- "Child World Buys Toy Division". Wall Street Journal. April 14, 1975. p. 3.
Child World Inc., said it bought for $3.5 million K.B. Marketing Systems Inc.'s toy division, consisting of nine retail stores under the name Children's Palace.
Alternate Link via ProQuest. - "Company History: Cole National Corporation". Funding Universe.
- Liebeck, Laura (August 3, 1992). "Child World is grounded: rescue by Lionel falters - Lionel Kiddie City". Discount Store News. Archived from the original on January 4, 2009. Retrieved June 22, 2009.
- Heiler, Brian. "Vintage Toy Store Pictures Part Five". Plaid Stallions (blog).
- Child World / Children's Palace Video Toy Chest (1990), retrieved 2020-01-23
- "The '80s Movies: Rewind...The Color of Money," fast-rewind.com
- Demster, Chas, "Filming Locations of Chicago and Los Angeles: The Color of Money," itsfilmedthere.com