Peter J. Hayes, president and chief executive of financially troubled Child World Inc., has resigned.
The company said Hayes would be succeeded temporarily by Thomas Kaung, executive vice president of CNC Holding Corp., Child World’s parent.
Hayes planned to take a position at another firm, which Child World did not identify.
His departure followed that of Chairman Dennis H. Barron, who resigned Dec. 6, two days after Child World suspended payments on more than $122 million in bank debt and $212 million worth of merchandise because of a severe cash shortage.
Hayes said in a statement that Child World, the nation’s second-largest toy retailer, has made some progress in negotiations with its creditors to restructure its debt payments. It also reportedly managed to sell an estimated $105 million in inventory during a massive pre-Christmas, price-slashing campaign.
In a meeting with unsecured creditors Tuesday, the company proposed repaying its bills to vendors owed less than $100,000 apiece.
The firm’s suspension of payments has reverberated through the toy industry.
Mattel Inc. and Tyco Toys Inc. announced this week that their fourth-quarter earnings would be significantly affected because of money they are owed by Child World. Analysts project that Mattel and Tyco will report bad-debt exposure of $20 million and $26 million, respectively.
On Thursday, Hasbro Inc. said its fourth-quarter earnings would be reduced by an as-yet-undetermined amount because Child World has not paid its bills.
Avon, Mass.-based Child World operates 182 stores.
Hayes came to Child World in June, 1988, after three years as chairman of Gold Circle discount stores, a division of Federated Department Stores.