Funko Will Dump $30 Million Worth of Collectibles Into the Trash
It’s like the plot of Toy Story. Unwanted toys are going to be sent to the disposal bin, but this time, it won’t be Buzz or Woody who’ll be facing the dump, but a legion of Stormtroopers, Chewbaccas, Harry Potters, and Yodas.
Waning demand for the collectibles and a surplus of inventory has spelled trouble for the company, which reported that its net income margin for 2022 contractred by -699 basis points to 0.4 percent compared to 2021. Its net income also decreased by 368 percent in 2022.
As a result of slow sales, Funko’s warehouses are at full capacity, prompting the toymaker to dump its collectibles.
"This includes inventory that the Company intends to eliminate in the first half of 2023 to reduce fulfillment costs by managing inventory levels to align with the operating capacity of our distribution center," Funko said in the report. “This is expected to result in a write down in the first half of 2023 of approximately $30 to $36 million.”
At the end of 2022, Funko had $246 million worth of dolls in its inventory, which was 48 percent more than its 2021 figures. Debt also rose for Funko in 2022. “As of December 31, 2022, total debt was $245.8 million, an increase of 42 percent compared to year ago levels,” the company wrote.
News of the toymaker’s sudden slump comes as a shock, as collectibles are still popular among children and adults. According to NPR, Funko was among the companies that made a huge profit during the pandemic, posting over $1 billion in net sales in 2021. Among the most popular Funko Pops! Are from the Harry Potter and Star Wars franchises.
