Can Buffett’s empire sail on?
Margaritaville Enterprises was key to singer being worth $1 billion just before he died
Jimmy Buffett, who died of cancer Sept. 1, was many things: a singer, a songwriter and a spokesperson for tropical escape.
But beyond crafting music that inspired listeners to grab a cold drink and take it easy, Buffett was also a businessperson who turned his personal brand into a lifestyle empire that included everything from restaurants and resorts to lines of merchandise such as at-home “frozen concoction makers” and cornhole game sets.
Now Buffett’s empire, named Margaritaville Enterprises after his signature song, must find ways to sustain its business without its founder. Along with music sales and tours, Margaritaville’s success helped propel Buffett into the billionaire ranks; in April, Forbes estimated his net worth at $1 billion. Representatives for the company declined to comment on its business.
In the days after Buffett’s death, retail and marketing experts said his legacy would continue to lure his fans and others to his businesses.
“It’s definitely a lifestyle associated with him and his personality and his music that he created,” said Barbara Kahn, a professor of marketing at the Wharton School at the University of Pennsylvania. But, she said, because his business is “bigger than just that, it could definitely live on.”
The company had $2.2 billion in gross annual revenue last year.
Most of Margaritaville’s revenue comes from licensing and franchising deals with various ventures, often with references to Buffett’s songs. The enterprise is linked to more than 100 restaurants, bars, grills and “lodging locations” in places as diverse as Ambergris Caye, Belize, and Pigeon Forge, Tennessee, a short drive from the Dollywood Theme Park, named for Dolly Parton.
There is Latitude Margaritaville Watersound in Panama City Beach, Florida, a planned adult community of homes for those age 55 and up, and the Margaritaville Vacation Club by Wyndham on St. Thomas. There are luxury condominiums and a cruise ship.
According to Forbes, Buffett had an estimated 28% stake in the company, which is headquartered in Orlando, Florida.
Margaritaville also has other investors, including private equity firms.
More Jimmy Buffett-related properties are coming. But Margaritaville could risk overextending itself, Kahn said.
“This is a lifestyle, and it’s a chill, fun island lifestyle,” Kahn said, adding that if it isn’t managed properly, it “can be something that loses some of its esteem without the founder’s identity.”
In 2021, Margaritaville Resort Times Square opened in New York to great fanfare. The $370 million property, which features a 32-foot-tall replica of the Statue of Liberty hoisting a margarita glass, is owned by Soho Properties. Soho’s partner, IMCMV Holdings, leased the location and struck a trademark license agreement with Margaritaville Enterprises.
In July, the resort entered Chapter 11 bankruptcy proceedings in an attempt to stop a foreclosure auction sale after Soho failed to make a debt payment, according to court filings.
The hotel was valued at $266 million to $350 million as of May, with revenues expected to exceed $25 million by the end of next year — a sign of the property’s potential despite the pressures of the pandemic, according to the filings.