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.
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. After the acquisition of Children’s Palace in 1975, 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. In 1981 the chain became a subsidiary of Cole National Corporation, a retail ownership group that is now a division of Kohlberg Kravis Roberts. 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.

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. 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.
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. 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. 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. In that interim period, company CEO Ron Tuchman resigned from Child World. The company did not replace him.
On July 1, eleven days before the imposed deadline, a massive sale began at all of the remaining 71 stores. Although this was done in an effort to raise funds, Child World was careful not to refer to this as a liquidation, instead calling it an “inventory clearance” sale. One month later, however, the sale did indeed become a full scale liquidation as in August 1, Child World announced that they were unable to complete the merger with Lionel. Most of the remaining staff in the corporate headquarters, including the merchandising department, was laid off and within six weeks, Child World wound down business and ceased to exist.