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Funko Pop toys were once a sought after collectible in the U.S., but a sharp plunge in their value has the company sending tons of figurines to the trash can.
Demand for the toys has tumbled so much that parent company Funko said it plans to “eliminate” between $30 million and $36 million worth of the vinyl figurines.
According to CBS News, Funko said it will trash its overstock of collectibles during the first half of this year.
In its most recent earnings report, the company said inventory totaled $246.4 million at the end of 2022, up 48% from 2021.
The news came as somewhat unexpected to Juli Lennett, vice president and industry advisor for NPD’s U.S. toys practice.
“I was a bit surprised because the collectible market is one of the big stories for 2022. Collectibles were up 24%,” she told NPR. “That’ll include any other types of action figure collectibles as well. But Funko, of course, is the biggest player in that space.”
At the same time, she adds, that jump still marks a slowdown when compared to the avid interest in collectibles seen just a few years ago.
Since the COVID-19 pandemic began in 2020, the “kidult” market — toys and collectibles aimed at ages 12 and up — has seen gradual growth in adults seeking nostalgia and a way to relieve stress.
Funko was part of that pandemic-era boom: It posted over $1 billion in net sales for 2021, a 58% increase from the year before.
Steve Nave, Funko’s chief operating officer, explained last week how company officials decided to throw out excess inventory.
“We went after the oldest inventory first,” he said during a conference call last week with analysts and investors. “Again, inventory that we felt like we could sell over time, but due to the operational constraints, it’s just better to get out of it.”
Funko Pop is a reminder that Afrofuturism representation matters
Afrofuturism as a term was coined in 1994 by culture critic and author Mark Dery.
He posed the question “Why do so few African Americans write science fiction, a genre whose close encounters with the Other – the stranger in a strange land – would seem uniquely suited to the concerns of African American novelists?” in his essay, “Black to the Future.”
He went on to use the term “Afrofuturism” to describe the work of Black artists, writers, filmmakers and philosophers who incorporated magical or impossible themes into their work while centering the Black experience.
According to Ytasha Womack, author of the book “Afrofuturism,” the umbrella term can be defined as “ a way of looking at the future, or alternate realities doing so through black cultural lenses. It does so by intersecting imagination, liberation, mysticism, technology.”
Womack says you can look at Afrofuturism in one of three main ways; as an aesthetic found in fashion, music and art, as an epistemology or a way of looking at the world or as a practice that can guide creativity.
CEO Brian Mariotti said in last week’s conference call that Funko keeps its excess inventory in a rented warehouse in Arizona and holding so many Funko Pops is “restricting our distribution centers throughout and incurring incremental container rental charges.”
Funko will use a third-party based in Arizona to destroy the collectibles, Nave said in the earnings call.
Funko is a Washington-based company that focuses on nostalgia toys. It opened in 1998, went public in 2017, and now employs 1,466 people across Asia, Europe and North America. The company also sells backpacks, board games, books, non-fungible tokens and wallets.
Known for their short stature, big block heads and wide eyes, Funko Pop toys depict some of the most iconic figures in pop culture — from Star Wars characters and professional athletes to actors and wrestlers.
Funko began selling the figurines in 2010, and they generated a loyal customer following in subsequent years.
Their popularity grew even stronger on the secondary market as rare collectibles resold for tens of thousands of dollars.
CBS News reports sales in its core collectibles category dropped 6.6% between 2021 and 2022, according to company data. Funko reported its profit fell 108% to $5.2 million in 2022 compared to the year prior.
Funko’s stock price fell 1.1% on Monday, trading at $9.75 a share.