Clouds of crisis grew thicker around Child World Inc. of Avon, Mass., Tuesday as the cash-strapped toy retailer announced deepening losses and a plan to delay for six weeks payments to suppliers and a syndicate of bank lenders.
Child World said it will suspend until Jan. 15 payments for merchandise ordered before Wednesday and suspend principal payments on $122 million of working capital. A $19 million bank payment is due Jan. 1.
The statement said Child World will continue to make interest payments on debt and will pay cash for all merchandise ordered in the Dec. 5 to Jan. 15 period.
Child World reported a third-quarter loss of $14.4 million on sales of $185.6 million, compared with a loss of $4.1 million on sales of $157.3 million in the same period last year.