Page 27 - Ty Warner Case Study

Management

“While he entrusted corporate matters to the executives, lawyers, and
accountants he employed, Ty treated the final decision about the particular
fabric or color of the company’s next Beanie Baby as a non-delegable
assignment,” court filing.

Ty Inc. is a privately owned company (100% owned by H. Ty Warner) which
has one of its headquarters base in a suburb 20 miles west of Chicago in an
unidentified glass and concrete building with no identification of what is inside.

Another headquarters is based in Oakbank and is equally discreet. The
Company’s official mailing address is a PO Box address and its telephone
number is unlisted.

With its headquarters in the USA Ty Inc. has also divisions abroad namely:

• Ty Canada,

• Ty Europe (Germany and UK merged),
• Ty Japan

Today, a rare Beanie - perhaps with a Ty Warner autograph - may still fetch
more than $1,000 at auction. The toy is still a good seller at retail, but people no
longer line up to buy them. Business researcher Hoover's Inc. estimated Ty
Inc.'s 2003 sales of Beanies and its other plush toys at $750 million, down from
$1.25 billion in 1999.

In 1999, Ty bought New York's Four Seasons Hotel for 275 million dollars,
followed by the 2000 purchases of the Four Seasons Biltmore Hotel in Santa
Barbara, California, and the nearby San Ysidro Ranch. Since then he has also
purchased the neighboring Sandpiper Golf Course.

During the same time period Ty was diversifying into high-value real estate, as
the Beanie Baby craze started to wane. Although sales of Beanie Babies and the
other Ty product lines continued at a high volume, the frenzied collecting mania
had evaporated.