Collectables brand Funko Pop! is struggling to off load inventory and now plans to eliminate approximately $30 million to $36 million dollars worth of product.
The backlog has left Funko's warehouses overstuffed, and forced the company to rent storage containers to hold the unsold stock of vinyl figurines with oversized heads.
The cost of this extra storage is eating into Funko's bottom line. The company reported a $47 million loss in the fourth quarter of 2022. Funko explained that its inventory totaled $246 million in 2022, up 48 percent from the year before.
"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 a press release.
While Funko cited waning demand as one reason for the surplus, the collectables market overall continues to grow.
"As we move forward, we remain laser focused with a high sense of urgency to build an operating foundation to support the long-term growth opportunities we envision for Funko, our partners and stakeholders," said CEO Brian Mariotti.