A toy maker known for its line of big-headed pop culture dolls depicting characters from film, TV and animation is planning to toss out about $30 million worth of the collectables to deal with some of the financial losses it is experiencing.
Funko Inc. reported last week that it suffered a fourth-quarter loss of $42.2 million after showing a profit during the same period a year earlier, according to the Associated Press.
Based in Everett, Wash., Funko officials told CNN that a combination of waning demand for the toys and a surplus of inventory is causing financial difficulties.
The more than $42 million loss in in the fourth quarter of 2022 is in sharp contrast to the $17 million profit posted during the same period the year before.
The company said it was holding onto about $246.4 million worth of dolls at the end of 2022, which is 48% more than they had on hand at the end of 2021.
They said they had to rent extra warehouse space last year to hold the buildup of collectible figures, which includes characters from Harry Potter, Disney, Marvel and DC comics, Star Wars, professional sports teams and pop music.
To help address the excess merchandise company officials said they planned to “eliminate” some of the inventory in the first half of 2023 “to reduce fulfillment costs by managing inventory levels to align with the operating capacity of our distribution center.”
The company’s Arizona distributing center was already filled to the brim with dolls and was forced to rent storage containers to handle the growing inventory, which now costs more to store than it is worth.
The company also announced that they would cut 10% cut of its workforce as a cost-saving measure.
Funko benefited during the pandemic boom, posting $1 billion in net sales for 2021 — a 58% increase from 2020 — but those gains didn’t hold up as the global economy reopened, according to CNN.
