Funko Pop! toys (FNKO) reached the heights of popularity during the pandemic. The big-headed pop-culture dolls were in huge demand in 2021, but the demand fell as the global economy reopened. Left with a large inventory and insufficient storage capacity, the company has decided to send $30 million worth of these toys to the garbage collector.
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In its fourth quarter report, Funko said that it was facing financial problems due to excess inventory and low demand for the toys that include celebrity figures such as Baby Yoda and Eddie Van Halen. The toy company said that it had roughly $246.4 million worth of dolls at the end of last year.
In a recent statement, the company said that it is planning to “eliminate” some of its inventory in the first half of this year, as a write down. They had rented excess space in warehouses in 2022 to store large amounts of toys. This means that the toys now have a value that is less than the cost of storing them. Funko is expected to send toys worth about $30 million to $36 million to garbage collectors.
In an investors’ call last week, Funko CEO Brian Mariotti said that their distribution center in Arizona was filled to the brim with dolls. Additional storage containers had to be rented to store the remaining dolls, which in turn was leading to rapid losses. So, the company needed to get rid of excess inventory. The workforce was also being reduced by 10 percent as another cost-cutting measure.
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Funko also reported a fourth quarter loss of $47 million, in 2022. In 2021, the company had a profit of $17 million, in the same quarter. The net sales in 2021, due to a boom in sales during the pandemic, was $ 1 billion. It was a 58 percent increase from 2020 but was unsustainable as the profits drastically fell in 2022. The company stock has also fallen by 9.4 percent to date.
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