If my memory serves me right, I believe the hole is so you can put a child's picture in it. I think there were a couple like this. I am sure another cutie will confirm if I am right or wrong. I think you put plastic at the back and then put a picture there.
After looking at it a lot, I've decided it's a toy, a teether. There are not enough stitches around the hole to make a towel topper, nor enough for an applique. Whatever, it's cute.
Jo
I just took at look at it and it is not made like the other towel hangers. This one is fill stitch with no applique lines or stops for trimming. I would not try to cut a hole in it unless you get creative and do a satin stitch finish in the hole or something else.
I think it's just supposed to look like a picture of a toy rattle that a child would hold.
Actually my kids had chewy teething rings that looked a lot like this.
http://designs.cuteembroidery.com...
Ok, chewy teething ring that makes sense. I had first thought towel holder but then didn't see the satin stitch around the hole or stops so I got a bit confused. Thank you for putting me straight.