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People Top 5
LAST UPDATE: Tuesday February 10, 2015 01:10PM EST
PEOPLE Top 5 are the most-viewed stories on the site over the past three days, updated every 60 minutes
- September 20, 1999
- Vol. 52
- No. 11
Bean There, Done That
Why Did Toy Mogul H. Ty Warner Pull the Plug on His Superpopular Beanie Babies? It's a Mystery–but Then, So Is He
That would be H. Ty Warner, surely the most enigmatic billionaire around. A mediaphobic marketing whiz who rarely grants interviews (one of his last was with PEOPLE in 1996), Warner, 55, rocked the toy industry six years ago when his litter of floppy cats, bears and other cutesy critters—priced at only $5 and in some cases sold for brief periods before being "retired"—spawned one of the biggest crazes in toy-industry history. It also launched a furious collectors' market: Some of the scarcer 264 existing Beanies have fetched up to $13,000 at resale. Last year, Warner's privately held company, Ty Inc., racked up an astonishing $1 billion in sales—making him, Warner bragged in a Wall Street Journal ad, the world's No. 1 toy maker, a fact some industry insiders dispute. His personal fortune is estimated at $2 to $4 billion, enough to land him a spot next month on the Forbes list of the 400 richest Americans.
The curt message that Warner posted on his Web site Aug. 31, announcing that Ty Inc. would retire the entire line of Beanies by the end of the year, is only the latest mystery to enshroud the elusive Warner. Once so flamboyant he made sales calls in a white Rolls-Royce Silver Shadow and a tacky fur coat, the toycoon now controls access to his life as tightly as he does his products, working quietly at his five-story, glass-and-concrete headquarters in Westmont, Ill., 20 miles west of Chicago. His company may be the only multimillion-dollar business around that has no identifying signs on its headquarters, no listed address and—to the chagrin of retailers—no listed telephone number. Few people can say they know him well; those who do don't talk about him in any depth. And employees are forbidden to answer questions about him. "Ty has become reclusive in recent years, and I think it's a marketing ploy," says Virginia Benes Kemp, a former toy designer who worked with Warner in the '70s. "I think he likes the public to feel he's like Howard Hughes, because it makes people want to know more about him." Even his name is a bit of a puzzle: He claims the "H" stands for nothing, but others say he was named for his father, Harold.
Yet Warner is no eccentric shut-in; he's not even all that weird. The never-married mogul lives serenely in suburban Oak Brook, Ill., in a $715,000 white contemporary home. In 1996, when he spoke with PEOPLE, Warner was sharing the house with his longtime girlfriend, Faith McGowan, 42, a divorced former lighting-store employee, and her daughters, Lauren, 15, and Jenna, 14. (In July, he paid $8 million for an 8,000-square-foot, Mediterranean-style house with ocean views near Santa Barbara, Calif.) "He's crazy about the kids," said McGowan. "He probably misses that he didn't have his own."
A lover of luxury cars, Warner drives to work in his 1993 Mercedes 600 SL (license plate: TYINC2) or his 1998 Ferrari, parking in an unmarked spot—no place is reserved for him—in the company lot. An accomplished classical pianist and a ferocious competitor on the tennis court, he unwinds by listening to his idol Mick Jagger. Partial to Italian cuisine, he has also enjoyed the cheeseburgers with onions at Page's Restaurant in nearby Hinsdale. ("He sits at the counter like any other customer," says owner Charles Page.) Warner even attends his share of parties and barbecues. "I see Ty in the supermarket, and he stops to talk," says neighbor Virginia Navarrete. "He's very down-to-earth."
Is Warner just a regular guy who's really rich (this March he plunked down $275 million to buy New York City's swank Four Seasons hotel), or is he some kind of troublesome genius? It depends whom you ask. Some acquaintances describe a world-class egotist who has been known to embroider the truth; others talk of a generous man with a photographic memory and boyish charm. They all agree on one thing: He's a brilliant marketer.
The older child of Harold Warner, a jewelry and toy salesman, and his wife, Georgia, a pianist, Warner grew up in the middle-class Chicago suburb of La Grange (he has a sister, Joyce, 51). As a student at Michigan's Kalamazoo College, he spent long hours indulging his passion for bridge. Even then, "there was a mystery about him," says former classmate Amy Mantel Hale. "He was a free spirit."
After college and shortly before his parents' bitter divorce, Warner joined his father as a salesman at Dakin, the San Francisco-based toy company. "He was probably the best salesman I ever met," says Paul Roche, Warner's supervisor there for several years. (Roche also claims that Warner told interviewers he designed toys for Dakin, but Roche says he was only a salesman.) Rodger Ericson, a North Carolina toy company executive who has known Warner for 29 years, agrees that "he's a charmer" and describes him as a ladies' man with "an unbelievable ego." Designer Kemp says simply, "He thinks he's God's gift."
And gifts, of course, require careful packaging. Driving around in a Rolls, Warner told PEOPLE in 1996, was part of his act. "It was all to get in to see the buyer," he explained. "I figured if I was eccentric-looking, people would think, 'What is he selling?' "
Roche says he fired Warner in 1980 for cooking up a competing line of toys; Warner told PEOPLE he left to pursue other things. With a $50,000 inheritance from his father, who died of a heart attack in 1983, and money he saved from his more than $100,000 annual earnings at Dakin, Warner created a white, floppy Himalayan cat called Angel. Priced at $20, it sold well. In 1993, convinced that there were no toys "in the $5 range that weren't real garbage," Warner launched a line of small, understuffed toys made of polyester plush and loosely filled with polyvinyl chloride pellets. "Everyone called them roadkill," he said in 1996. "They didn't get it. The whole idea was that they looked real because they moved."
Within months and without any advertising or distribution to big retailers like Toys "R" Us, Beanies took the industry by storm. "No store had them all," explains Mary Beth Sobolewski, editor of the Ty Inc.-licensed monthly Mary Beth's Bean Bag World, of Warner's shrewd sales strategy. "There was the thrill of the hunt."
With success came a chance for Warner to show he has a generous side. His charitable efforts include the Princess bear, which raised more than $15 million for the Diana, Princess of Wales Memorial Fund, and the 150,000 Beanie Babies he recently gave to young refugees in Kosovo. Warner also awarded each of his some 300 employees bonuses equal to their 1998 salaries. Yet the boss is no mild-mannered Gepetto. In six years he has filed some 50 lawsuits, many for trademark infringement. (Warner has also been accused of copying competitors' designs for his animals.) Meanwhile, many exasperated clients and shop owners complain that it is hard to reach the company. "They have no interest in dealing with us," says Beth Savino, a Toledo, Ohio, toy retailer. "Their attitude is, 'We don't need you.' " Ann Nichols, a Ty Inc. spokeswoman, says the unlisted number is necessary because the company can't keep up with demand.
Recently, however, that demand has shrunk. Within the last year, according to retailers and industry insiders, Beanie Babies sales dropped as Pokemon toys caught fire. The sales lull explains Warner's announcement that he's discontinuing Beanies, say many analysts, who believe he's simply clearing the decks for a new line of similar products in 2000. "By saying this is the end, you create demand for what's next," says Russ Berrie, CEO of Russ Berrie and Co., a Ty Inc. rival. In fact, Warner filed trademark registrations just last month for several Beanie-like names, while McDonald's has said it will continue to issue its Warner-made Teenie Beanies next spring. "Some companies are in it for a quick buck; I want longevity," Warner said in 1996, adding that one sure way to stick around "is to control the fad."
Another, it seems, is to control his image. A big baseball fan, Warner threw out the first pitch at the Chicago Cubs' Beanie Babies-themed day in 1997. Otherwise, he has made only a few public appearances of late, usually at toy fairs where he carefully dodges cameras or shows up in disguise. "Ty is a very buttoned-up person," says Harold Nizamian, Dakin's former president. "He doesn't disclose his feelings."
So what makes this complicated man tick? Warner himself may have said it best. "It was fun," he told PEOPLE of a rare visit to a Hinsdale toy store where he cheerfully signed Beanies for a group of children a few years ago. "But I think leaving it all a mystery is better."
With additional reporting by Joni H. Blackman and Mary Green in Chicago, Jamie Reno in San Diego and Chris Coats in Houston
- Joni H. Blackman,
- Mary Green,
- Jamie Reno,
- Chris Coats.
October 08, 2015
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