Surely you have seen the news: Funko numbers are not going well and he has announced that he is going to throw away 30 million dollars in figurines (which come to be about 28 million euros in exchange). But, surely this is precisely what does not add up to you: if the company is really that bad financially speaking, Why throw so much money away? Well, believe it or not, it has an easy explanation.
These are not good times for Funko
The last Funko company financial call It has not brought good news. The company has acknowledged that it is going through a major patch with a painful drop in profits in its fiscal fourth quarter. The firm of the famous vinyl dolls has recognized that these results are due to a combination of circumstances among which we find, of course, a decrease in demand for its famous (obvious) product.
The pandemic hasn’t helped either and not exactly in the sense you think. And it is precisely that the interest in the Funkos increased, generating some net sales billion dollars, but when the economy mundia reopened and everything started again, people seemed to forget about the brand, causing a particularly notable drop: “A combination of macro factors and problems specific to Funko have interrupted our financial and operational performance to an unacceptable degree,” he confessed. Brian Mariotti, CEO of the company, in the conference call.
Besides the drop In the demand for their toy, there is another matter that causes them a big problem: excess inventory, which has risen 48% compared to the previous year and which is generating extra expenses for the company that is already difficult to maintain.
Millions of toys in the trash
Last year, Funko had to rent more warehouse containers -their Arizona distribution center was full- to house all the figures they hoped to sell and were unable to place -precisely the result of the high expectations stemming from the pandemic. This expansion of space to store stock is not exactly cheap and has, in fact, generated a loss of money at an accelerated rate, not to mention that the distribution costs involved in moving all those surplus funkos are also high.
In short, and as well explained in CNN Business, the product is now worth less than the cost of holding or shipping it to stores for possible sale, so in the end they have made the most drastic but also effective decision: remove stockthus lightening the 246 million dollars in dolls that are currently stored on the shelves.
In addition to this striking decision, the CEO acknowledged that he will have to carry out other actions such as a Cut 10% of your workforce to continue saving the furniture.
A therefore complicated situation that perhaps could even influence the current cost of the Funkos, but that they hope to know how to manage to control costs and thus channel the pace of this popular company that has also hit a good blow in the if after his dismal results.
I’m sure it will come out on top but just in case… take care of your Funkos more than ever. Who knows if in a little while they could end up becoming a relic that they no longer manufacture…
