At one stage, you could even get mini versions (‘Teenie Beenies’) in McDonald’s Happy Meals. That’s when you know something’s made it big…
But it turns out Ty Warner, the Ty-coon behind the Beanie Babies menagerie, doesn’t share the glass-eyed innocence of his creations. The entrepreneur has agreed to admit charges of tax evasion by hiding more than $3m (£1.9m) in a secret Swiss bank account, and now faces a fine of $53m and up to five years in prison.
Beanie Babies’ popularity might have faded by the late 90s, but Warner is no fading star. His net worth is estimated at $2.6bn by Forbes, making him the 209th richest man in America.
Nevertheless: according to court documents, Warner opened a secret UBS account in 1996, and in 2002 moved $93m to Zurich-based Zürcher Kantonalbank. In 2002 alone, that account produced over $3m of income, which he didn’t mention to tax officials. Although to be fair to him, in 2002 he did pay a huge amount of tax on the $50m of income he did report.
Analysts have already begun the argument about whether his tax dealings will affect Warner’s brand or not. Branding expert Laura Ries thinks not:
‘It’s not as cool as it was, but I don’t think consumers care the owner didn’t pay his taxes and is in big legal trouble.’
MT is inclined to agree. Most 10-year-old girls – the brand’s target market – don’t put a lot of thought into the tax dealings of the creators of their favourite toys. What’s much more likely to put them off is the brand’s eyeball-curdling website. Ouch.