CHICAGO — With his Beanie Babies stuck at sea aboard a flotilla of slow boats from China, Chicago billionaire Ty Warner has taken to the skies to circumvent the ongoing shipping crisis, booking entire cargo planes to get his signature stuffed animals home for the holidays.
If only Buckley the Deer and Lola the Llama could earn air miles.
Warner, whose Westmont, Illinois-based Ty Inc. has been manufacturing Beanie Babies in China for decades, has chartered more than 150 flights from airports in Shenzhen, Guangzhou, Shanghai and Hong Kong since October, airlifting the Beanie Babies more than 6,000 miles to O’Hare International Airport.
From there, the Beanie Babies are sent to the company’s Bolingbrook, Illinois warehouse for distribution to retailers around the country.
“The widely-reported problems with global supply chains have cast a pall over the coming Christmas. There’s too much doom-and-gloom out there,” Warner said in a news release. “I’m here to tell our customers that, despite what they might have read or heard, Christmas is not canceled.”
Surging demand and a shortage of workers has led to a pandemic-fueled backlog this fall of cargo ships anchored off the California coast, waiting to unload products. Beanie Babies, which are normally shipped by sea from China, were among the many products cast adrift by supply chain issues that continue to disrupt worldwide commerce.
While the cargo planes cost $1.5 million or more per charter flight, Warner said the company will hold the line on its $5 to $10 price point on Beanie Babies.
“We have brought in millions of Beanie Babies over the course of the last month and a half,” Tania Lundeen, vice president of global sales for Ty Inc., told the Tribune. “This is really improving the time of getting the product to our retailer shelves.”
Ty isn’t the only company putting key holiday merchandise on planes to avoid shipping logjams ahead of the holidays.
Global demand for air cargo was up 9.1% in September compared with the same month in 2019, the International Air Transport Association said in a news release earlier this month.
Hasbro, Nike, Levi Strauss & Co., Lululemon, Ralph Lauren, Under Armour, Adidas, Deckers Outdoor Corp. — owner of UGG and Hoka shoe and apparel brands — are all using pricier airfreight to get around congested ports or make up for production delays, at least when it comes to key products, according to recent earnings calls and investor conferences.
Under Armour has used a lot of airfreight this year, “which we’re not excited about, but it’s a necessary thing with the challenges that we’re all faced with,” Chief Financial Officer David Bergman said during an earnings call earlier this month.
While flying goods is more expensive than shipping them, supply chain bottlenecks are driving costs up and closing the gap, according to the International Air Transport Association. Before the pandemic, moving cargo by air cost more than 12 times as much as sea shipping, but as of September, it was only three times more expensive, according to the trade association.
Introduced in 1993, Beanie Babies quickly became a collectible fad, with annual sales topping a reported $1.4 billion by 1998 and rare versions of the plush toys fetching thousands of dollars on the secondary market. In 1997, Ty partnered with McDonald’s, offering Teenie Beanies as Happy Meal freebies that became hot collectibles on their own.
By the new millennium, the Beanie Babies frenzy was over, but Ty Inc. continues to churn out new products every year, adding Beanie Boos, purses and most recently, animal masks to the menagerie of offerings.
The private company does not disclose annual sales, but Beanie Babies made Warner one of the richest entrepreneurs in Illinois, with a net worth currently estimated at $3.6 billion, according to Forbes. Warner has diversified his investments, building a high-end hotel portfolio that includes the Four Seasons in New York, which he bought for $275 million in 1999.
In 2014, Warner received two years’ probation in a tax evasion case after agreeing to pay a $53 million civil penalty and at least $27 million in back taxes. Warner pleaded guilty to tax evasion after failing to report $24 million in income from undeclared Swiss bank accounts he held from 1996 to 2008.©2021 Chicago Tribune. Visit chicagotribune.com. Distributed by Tribune Content Agency, LLC.