Funko is going to dispose of $30 million worth of Pops! figures to ease its financial situation and reduce storage expenses. in a trash dump. The financial results for 2022 have just been disclosed by the collectible toy manufacturer Funko, and they don’t look good. Funko has already lost about $50 million this year, and one of the reasons for this shortfall is because the company has more inventory than it can store and mounting rental costs.
Trying to Make Up
According to a statement made by Funko, the company plans to manage inventory to match operating capacity at its distribution center, which “expected to result in a write down in the first half of 2023 of approximately $30 to $36 million.” This means that Funko intends to dump a ton of Funko product in a landfill and free up rental space to lower storage costs. Not only that, but this could be a chance for something better for the company as they try to catch up on some losses, and gain more profit later on.
Too Much of Something
Inventory levels exceeding the company’s working capability was another aspect noted in Funko’s 2022 report, as reported by Kotaku. Basically, Funko has more Pop figures than it can store, so it needs to get rid of at least $30 million in inventory in order to save money on storage costs. Funko constructed a distribution center last year, according to the report, and paid exorbitant rental costs to store extra inventory in shipping containers there. In order to handle all of those Pops, who will likely be the first to go after the layoffs its CEO had said, it also had to hire more personnel.
In essence, the company’s distribution facility is overstocked with its iconic vinyl figures, and it will be less expensive for Funko to destroy them than it would be to keep the extra stock in the hopes of selling it later. The business has so much unsold inventory, in fact, that they’ve had to spend a fortune hiring shipping containers to store some of the goods. And with this new found plan of theirs, this could turn around a whole lot and maybe Funko could look towards a different direction this year and make more profits than losses!
