Ty Warner is the creator of Beanie Babies. If you were alive in the 1990s, chances are you either owned one, bought one, or watched someone go absolutely feral trying to get one. The colorful, under-stuffed plush toys sparked a collecting frenzy unlike anything the toy industry had seen before. They were cheap, adorable, intentionally scarce, and somehow impossible to find. Fueled by limited releases and near-mythical retirement announcements, Beanie Babies became an obsession, and Warner, their mysterious creator, became a billionaire.
But the Beanie Baby craze was just the beginning. Warner's business instincts went far beyond plush animals. While the public was distracted by the collectibles, Warner was quietly building a second empire, this time in luxury real estate.
Ty Warner's story is one of the most improbable billionaire trajectories in American business. He was a failed actor. A college dropout. A toy company middle manager. And yet he parlayed a single epiphany, sparked on a solo vacation to Italy, into one of the strangest and most lucrative business careers of the 20th and 21st centuries…
Billionaire Beanie Babies Founder Ty Warner /Chris Hondros/Getty Images
Failed Actor, Reluctant Executive, Accidental Toy Genius
Ty Warner was born in Chicago on September 3, 1944. After attending high school in Illinois and a brief stint at St. John's Military Academy in Wisconsin, Warner enrolled at Kalamazoo College. But the lure of Hollywood proved stronger than his academic ambitions. He dropped out after his freshman year and moved to Los Angeles to become a movie star. That didn't work out.
Warner returned to Chicago and began working for toy manufacturer Dakin, the company behind licensed plush toys for Warner Bros. and Disney. Over the next two decades, he learned every corner of the toy business, including production, pricing, and marketing. In the mid-1980s, following an inspirational vacation in Italy, Warner mortgaged his home and poured his savings into launching his own company: Ty Inc.
The Birth Of Beanie Babies
Ty Inc. released its first plush, pellet-stuffed animals in 1993. The originals, including Legs the Frog, Squealer the Pig, Patti the Platypus, and others, were simple, under-stuffed, and designed to sit upright. They sold for just $5. Warner kept production intentionally limited, retired characters suddenly, and released new ones with little warning. That scarcity fueled a collecting frenzy.
At the height of the craze in 1995, Ty Inc. reportedly cleared $700 million in profit on $1.4 billion in revenue. Parents hoarded them. Kids traded them. Counterfeiters tried to fake them. Collectors speculated wildly. One of the most popular toys of all time had no TV show, no movie, no fast food tie-in. Just hype, genius marketing, and a fiercely loyal fan base.
Overwhelmed by success, Ty Warner chose to stop producing Beanie Babies in 1999. However, people were still clamoring for the stuffed animals, and he began manufacturing Beanie Babies again in 2000. With the relaunched line, he made a shift towards the business model he had experienced while employed at Dakin. A craze, by definition, is short-lived, and he knew the demand for regular Beanie Babies would begin to decline. He licensed characters from popular television shows and movies, such as "SpongeBob SquarePants", "Dora the Explorer", "Shrek the Third", "Ice Age: Dawn of the Dinosaurs", and "Legend of the Guardians". He began producing Beanie Babies based on characters from these projects, ensuring that the toys remained relevant. He also embraced the digital world, creating a line called Beanie Babies 2.0. Beanie Babies 2.0 are equipped with a digital code that can be used to access an interactive website. He also streamlined production and became more efficient about completing orders.
In addition to his toy business, he became known for philanthropic activities. He donated over $6 million to the Andre Agassi Foundation for underprivileged children in Las Vegas. Another $4.5 million went to the creation and development of the Ty Warner Park in Westmont, Illinois, and the Ty Warner Sea Center in Santa Barbara, California.
He donated over one million Beanie Babies to children in Iraq and Afghanistan, and commissioned a series of Beanie Babies modeled after important charities, with all the proceeds from their sale going directly to the charitable organization.
He even gave $20,000 to a woman trying to raise money for a potentially life-saving stem-cell procedure she desperately needed. She was a total stranger. He'd just stopped to ask her directions and they fell into conversation.
From Dolls To Hotels
Flush with cash in the mid-1990s, Warner began diversifying. In 1999, he paid $275 million to buy the Four Seasons Hotel New York. He later spent $120 million renovating it. Unlike most Four Seasons properties, which are typically owned by investment firms or real estate groups, Warner owns the land and building outright, a rare arrangement.
He quietly built a hospitality empire, buying or developing some of the most exclusive resorts in North America. Today, Ty Warner Hotels & Resorts includes:
- Four Seasons Hotel New York – Purchased in 1999 for $275 million
- Four Seasons Resort The Biltmore Santa Barbara – Purchased in 2000 for $150 million
- San Ysidro Ranch, Montecito, CA – Purchased in 2000 for $150 million
- Las Ventanas al Paraíso, Los Cabos, Mexico – Acquired in 2004
- Four Seasons Resort Hualalai, Kona, Hawaii – Acquired in early 2000s; later took full ownership
The IRS, The Swiss Account, And Redemption
Unfortunately, there was a speed bump in 2014. Back in the mid-1990s, following the advice of financial advisors, Ty began squirreling money away in a Swiss bank account. When the account was discovered by the IRS, they took him to court in January 2014. At one point, his offshore account contained nearly $107 million. The IRS claimed it was one of the largest offshore accounts they ever found. The largest belonged to Igor Olenicoff, who kept upwards of $240 million offshore. Based on the fact that he was just following his advisor's advice and his long list of charitable acts, Warner's legal counsel successfully pled his sentence down from up to five years in jail to two years of probation and 500 hours of community service at three Chicago-area high schools. He also had to pay $100,000 in fines. He had already paid a $53 million civil penalty and $27 million in back taxes.
Where The Empire Stands Today
When you add it all up, today, Ty Warner is sitting on a plush net worth of $6 billion. Beanie Babies are no longer the cultural force they once were, but Ty Inc. still exists and continues to release new products. Meanwhile, Warner's hotel properties are among the most prestigious in the world. All of it started with a failed acting career, a stuffed platypus, and a vacation epiphany. Not bad for a middle manager with a mortgage.