Funko sends $30 million worth of his Pop! vinyl figures to a landfill for the purpose of reducing the company’s overabundance of inventory, my city reports.
“Inventory at year-end was $246.4 million, an increase of 48% from a year ago,” reads a press release the company released this week. “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 our fulfillment center operational capacity. an impairment in the first half of 2023. of approximately 30 to 36 million dollars.
Essentially, the company has too many of its iconic vinyl figures in its distribution center, and it will be cheaper for Funko to destroy them than to store excess stock in hopes of selling them at some point. In fact, the company has so much unsold inventory that it was forced to spend a ton of money renting shipping containers to hold some of the product.
“During the fourth quarter and into early 2023, we made progress in resolving operational issues that impacted our results in the second half of 2022,” CEO Brian Mariotti said. “We have strengthened our management and operational leadership team and have taken significant steps to improve our operational efficiency. We are delighted that the Funko brands continue to see strong consumer demand from our incredibly loyal global fan base. and resilient, as evidenced by 37% direct-to-consumer growth and strong sales in the fourth quarter.
One of the reasons for the situation is the shortage in the supply chain, but there was a short-lived increase in Funko Pop! sales at the start of the pandemic. Those sales have since plummeted, and $30 million of them are heading to landfill in Arizona. Fans of video game history might recall a similar tactic when Atari buried around 700,000 video game cartridges in the video game crash of 1983. Earlier this week, at least $100,000 of magic the gathering the cards were also thrown in a landfill, because my city reported.