Funko suffers significant losses, announces layoffs and destruction of surplus figures

The film industry goes hand in hand with merchandising, i.e. products, from figures to everyday objects, on aspects or characters of different productions. One of the big names in the sector is Funko, a US toy company which, among other products, markets POP!popularly known as Funko Pop, figures of approximately 10 centimeters on the characters of films or series that are characterized by their large head in relation to the proportion of the body.

Despite being one of the most famous companies in the sector, 2022 has been a year of economic losses for Funko, mainly due to its terrible fourth quarter, his worst moment last year. On these dates, they’ve basically doubled their inventory, but profit margins have gone down. In the conference intended to update the information of the company (via ICv2), the executive director of Funko, Brian Mariotti, explained that the situation in which the company found itself cannot be admitted: “It was clear from our last call to investors that the company and our operations have reached an inflection point. A combination of macro-environmental factors and Funko’s specific issues have adversely affected our financial and operational performance to an unacceptable degree.”

Compared to 2021, in which Funko was estimated to have generated approximately $17.4 million in Q4 profit, the same period, but in 2022, not only was there no profit, but the losses reach the figure of 46 million dollars. One of the biggest drivers of losses has been the company’s new distribution center in Arizona, which opened in 2022. This location is so overwhelmed with inventory that the company she was forced to rent containers to store what didn’t fit in the building. The money that has been invested in these rentals has caused a major negative impact on the company.

Overall, the average fourth quarter sales of all companies in the United States in 2022 It decreased by 1%, but in the particular case of Funko it was 4.7%, rising from $253 million in 2021 to $241 million. Excluding the fourth quarter and analyzing the whole of 2022, the average sales of all companies in that country are up 29% compared to 2021, but Funko lost $5.2 million. The first three quarters have been crucial for the company to cushion the blow of the last few months.

drastic solutions

Given the bad figures that Funko is done with in 2022, company founder Brian Mariotti returned to the CEO role in December, replacing Andrew Perlmutter. In an effort to improve the situation, it announced the hiring of former Walmart.com CEO Steve Nave as chief operating officer (this position did not exist before at Funko) and chief financial officer. In the conference cited above, they reveal it They will cut staff by 10%.as well as other cuts, such as reducing excess inventories valued at between $30 and $36 million.