Core meltdown at Madame Tussauds as owner Merlin loses his magic

On a stormy, cloudy tomorrow in September, the chaos, which was unleashed by the strikes on the London underground, did not move the trade fair of the chattered tourists on the Marybone Road for Madame Tussauds.

Once inside, Bubblegum blasts pop blasts of the speakers, while uncanny replicas by Sir Sadiq Khan, Harry Styles, Meghan Markle and Elizabeth II.

Depending on how you look at it, the 189-year wax museum is either a nostalgic ode to spend a few hours to the era of the celebrities in front of the influencer or at almost £ 30, a claustrophobic and overpriced way.

For his owner Merlin Entertainments, it is one of several millions of pounds of headache who ask questions about whether the theme park and the attractions giant have lost its magic.

Merlin is known as the owner of Madame Tussauds, Legoland, Alton Towers and Chessington World of Adventures and organizes around 120 attractions worldwide and organizes more than 60 million visitors every year. The company achieved record income in the middle of a tourism after pandemic in 2023.

Despite the increasing number of visitors in 2024, the revenue dropped by 3.2 percent to 2 billion GBP (or almost 1 percent with currency fluctuations), while the company was losing a loss before taxing 492 million.

After the company was forced to reduce 384 million GBP from the value of some of its largest brands, including a depreciation of Madame Tussauds around 163 million GBP, which has been asked about its relevance in recent years.

“[Madame Tussauds] is a model that has long been tracked down beyond its durability. I don’t think that does not work if you see famous people what feels like a real basis, and I don’t think that works now, ”says Greg Johnson, analyst at Shore Capital.

It goes beyond Madame Tussauds. The company also lowered 110 million GBP or 35 million GBP of the value of the recently opened Legoland locations in New York and Korea and admitted that both are “continued to travel”.

At the same time, the concerns of almost 3.9 billion GBP are growing in debts, a large part of which were private and throughout the pandemic. The costs for the maintenance of his debts were just under 380 million GBP in 2024.

Last month, the S&P Global Ratings classified one of his mother laws, Motion Midco LTD, to CCC+ from B- and at the same time classified the output ratings for its primary debts from B to B- and its high-ranking bonds from CCC to CCC.

Analysts from S&P warned that “persistent high cash burns could lead to inadequate liquidity after 12 months without describing the cash injection”, which the current capital structure of the company did not describe as “long -term long -term”, since they have high debt compared to the size of the group and the high cash burn. Merlin’s bonds sent it into a spiral.

Merlin belongs to a consortium of the private -equity giant Blackstone, Kirkbi -the family society of the billionaire Kirk Kristiansen, the Lego dynasty -and the Canada Pension Plan Investment Board. A large part of Merlin’s debt is the result of a take-private deal in which the London stock exchange left in 2019. Further loans were accumulated during pandemic.

An investor informed the Telegraph that they believed that the pace in which Merlin burned through money could leave the company with “No Puffer” – in an industry in which their success is often dictated how much they spend.

“In our industry we live from repeated visitors and repeated visitors are driven by the capital expansion and new trips and attractions every year,” says Dennis Speigel, founder of the International Topics Park Services. “Some of the parks that have gone through dry periods and have not used trips and attractions for three or four years drags the number of visitors dramatically.”

Merlin spent a lot. In 2024, Merlin Hyperia, the highest roller coaster in Great Britain, in Thorpe Park and a new “Family Achterbahn” in Legoland Windsor opened. At Alton Towers, its long-standing Nemesis roller coaster has restarted to high praise.

So far, it has invested in 2025 and has opened the world’s largest Legoland in Shanghai and a massive new Peppa PIG theme park in Texas. Madame Tussauds also installed new wax plants from celebrities such as the last of us actor Bella Ramsey.

A Merlin spokesman says that he “has a healthy operational cash flow with plenty of liquidity for investment and business purposes” and his latest investments “persistent trust in the adventure industry”, with profits before taxes to 573 million GBP.

Merlin burned both bosses and cash. Long -time boss Nick Varney, the businessman, who attributed Merlin to the giant he is today, in the retirement of 2022.

“Merlin didn’t help that, this short time,” says Speigel. “You lose this continuity, consistency, operation, development, expenses and everything else.”

Since Eastwood, she has revised Merlin’s business model to reduce excess costs and reject business on its largest themed parks and attractions. This included an attempt to sell his business for marine life, even though the process was stopped after no suitable commandments for the aquarium came about.

Ms. Eastwood’s overhaul comes, since the leisure companies were exposed to tax -rising costs due to the tax action by Chancellor Rachel Reeves to employers who increase employee costs.

At the same time, people now spend less when they visit theme parks and attractions. Ms. Eastwood wrote in Merlin’s accounts and said that visitors are “increasingly selected where and how they spend their available income”. For this reason, she said Merlin had to increase promotions and discounts.

Ryan Ogilvie, founder of the Traders themed park, agrees that inflation has steamed demand. However, he believes that the experience of visiting Merlin’s park has decreased in recent years.

“The cost of living definitely has an impact on people, especially somewhere like Alton Towers, where they have to pack and go.

He is not only in his criticism. While most people who visit a theme park or spend the afternoon at Madame Tussauds is a rare undertaking, there is a huge community of obsessives of the themed park and a flourishing online community that is dedicated to these venues. Many of them share the same concerns with the lack of availability of popular trips that are often mentioned.

Perhaps Merlin’s greatest concern is plans from Universal to open a massive new park in Bedfordshire, which was given the green light this year. Due to Open in 2031, Universal expects 8.5 million visitors in the first year after the opening.

“It will draw from all over the UK,” says Speigel.

“My children always want to return to Disney or Universal Studios because they recognize the characters and topics as soon as they go into the park and experience them,” added Ogilvie.

According to the latest reports, massive franchise companies such as James Bond, Paddington and the Lord of the Rings in Universal Park could appear.

“Disney and universal have the luxury of opening this entire back catalog and diving into what they want,” says Ella Baskerville, Managing Director of Blooloop, which offers insights into the sector of amusements.

Merlin has put his hopes for an 85 million pound contract with the creators of the HIT video game Minecraft, where it is opened in Great Britain and the USA with journeys and attractions with Minecraft motifs.

“I think that could [be a game-changer]”, Says Ogilvie.” I mean the Minecraft film was terrible, but it made a lot of money. “

Since the customers are still cut back and the ghost of Universal’s Park hangs over it, it can need more than pixelated bricks to put the magic back into Merlin.

“I see themed parks that they should distract them from everyday concerns,” says Ogilvie.

“When I go to a universal or Disney theme park, I always forget that I have spent 15 giants or whatever for the arrival in Alton Towers or Thorpe Park, I like Jesus, how much for a really S-HOT? ‘”

A Merlin spokesman said: “Merlin Entertainments runs some of the most exciting and most iconic brand maintenance goals in the world and continues to provide solid financial performance in a challenging market.

“In 2024 we achieved robust income, increased the number of visitors and introduced our global transformation strategy to improve profitability and efficiency, which led to an underlying EBITDA [pre-tax earnings] of £ 573m. Since the introduction of a new uniform operating model, we have optimized the company to reduce operating costs and to promote long -term and sustainable growth. “