LOS ANGELES – Funko, the company that produces the popular Funko Pop! collectables, is reportedly facing a significant inventory issue. In a recent earnings call, the company revealed its plans to dispose of hundreds of thousands of its pop culture-inspired figurines. The news was so devastating that Funko’s stock price plummeted the following day.
According to a press release, the company’s inventory at the end of the year was RM1102.89 million, an increase of 48% from the previous year. To reduce fulfilment costs and manage inventory levels, Funko plans to eliminate excess inventory in the first half of 2023. This will result in a write-down of approximately RM134.28 to RM161.14 million.
The company’s CEO, Brian Mariotti, stated during the earnings call that the new distribution centre in Arizona was overflowing with excess inventory. The company has been renting shipping containers to store the excess stock, leading to significant financial losses. Mariotti arrived just last year amid an executive shakeup following declining earnings news.
The excess inventory is partly due to a temporary surge in sales during the pandemic’s early years. As demand subsided, the company found itself with a ton of extra stock at the same time sales were dropping. The Funko Pop! collectables market has also faced saturation, with some questioning how many more versions of popular characters are necessary.
The company’s stock price has taken a hit, falling 25% this week as the company revealed its plans to dispose of excess inventory and lay off 10% of its employees. Funko Pop! collectables have long been propped up by a secondary market of speculators who try to predict which release will be rare and valuable in the future.
Despite the occasional rare and valuable find, the majority of Funko Pop! collectables end up being worthless. The excess inventory appears to be headed for a landfill in Arizona, which has raised concerns about environmental impact. Funko’s decision to dispose of excess inventory is a difficult one, but one that the company hopes will help manage costs and reduce waste. – Kotaku