Funko incoming CEO talks Walmart partnership, new products, NFT pipeline, and supply chains
Funko incoming CEO Andrew Perlmutter joins Yahoo Finance Live to discuss the pop culture merchandiser's latest personalized product lines, its Walmart partnership, the prospects of trading Funko digital assets in the NFT market, and how the company has fared despite supply chain obstacles.
Video Transcript
- Welcome back to Yahoo Finance Live. Funko shares are in focus for us here after the toy maker inked a new deal with one of its largest customers, Walmart. The deal will find Funko arriving to Walmart's greeting card aisles at some 2,000 stores. Let's talk more about this and the business with Funko's President and incoming CEO, Andrew Perlmutter. Andrew, good to finally speak with you here. Why the greeting card aisle?
ANDREW PERLMUTTER: Thank you so much for having me on. We couldn't be more excited to be expanding. Funko's known for innovation, and we are excited to bring our innovation into a new aisle, the greeting aisle. As you mentioned, we've partnered up with Walmart in 2,000 stores. The official launch date is 12/26. And what are we launching? We are launching Popsies. The Popsies is a 3D figural greeting that gives you an alternative. You know, a lot of us buy greeting cards, and we get greeting cards, and they have these lovely messages written in it. And you open it up, and it's really lovely, and then you don't know what to do with it. So either you put it into a drawer, or you put it on-- throw it away in some cases.
Well now, Funko brings Popsies, which allows you to get a greeting, and when you press this button, he gives you-- Bob's Big Boy here gives you a big hug. And he's a super big deal. And when you're done, you can tuck the message away, and his arms go back down. And like the stuff behind me, you can set it on your shelf and you can collect them for all the special occasions in your life. So we're really excited to be announcing this. It comes in this really cool try-me package, so you can see all the different messages while you're in the store. And we're really excited for that.
- That Big Boy guy kind of looks like me a little bit. I would definitely go to get one, and I kind of really dig that. Yeah, that's no bad. That's not too shabby. You know, I was in that Walmart over the weekend, Andrew. It was pretty packed. What's your read on the holiday season?
ANDREW PERLMUTTER: Yeah, so, so far we are seeing phenomenal success. You know, our year so far has been really, really strong, and we are continuing to see that good foot traffic in the stores. And we've expanded our product selection to many new categories.
And we are seeing really good success across the board, whether it's Loungefly, our soft wares and accessories company, or if it's our new board game division where, obviously, this is the time of the year where a lot of people are doing board game shopping. And then there's our core collectible business of which Popsies is part of. And we're seeing-- not only domestically but globally-- people continuing to adopt the Funko brand as their go-to pop culture provider. So we're thrilled with that. We're thrilled with the business that we're seeing in both mass and specialty and online.
- Andrew, it's Akiko here. I have to tell you you're putting a smile on my face with those figures.
ANDREW PERLMUTTER: All right.
- On a day when the headlines have not all been positive-- we should mention this is your first interview as incoming CEO-- and when you were tapped for that role, you talked about the need for more product diversification, getting in those additional revenue streams. You've already highlighted some new products out on the market, but how do you see the mix changing up under your leadership?
ANDREW PERLMUTTER: Yeah, that's a great question. So I will say that we are a pop culture company with our DNA in collectibles. So you will always see us take that collectible category and really work on maximizing it, whether it be through various channels or geographies around the world. We are a pop culture company, and collectibles are key to our DNA.
That being said, as you mentioned, we are expanding. We're expanding into soft lines and collectibles with the Loungefly brand, and we're seeing great success across the board there. As we continue to look at how do we grow that brand internationally and continue to penetrate and grow those markets around the world like we've done in the US. And then the games business. 'Tis the season for game giving, and we are seeing really good success across the board. So you'll continue to see us work on expanding our product selection where it makes sense and then really working on growing those global markets as we continue to expand our brand outside of the US.
- How many NFTs do you plan to drop next year?
ANDREW PERLMUTTER: We are excited about the digital business. We look at our business broken down into three major buckets. There's the physical hard lines, soft lines and accessories, and then digital. And there's a lot of elements to digital, but our NFT launches have been so successful since we started introducing NFT collectibles from Funko. And we do it in a very different way than anybody else where we tie a physical product to the digital.
So through the randomization process, you have the ability to not only buy a NFT digital but also get a physical sent to you from Funko. So that's the way that we're continuing to innovate and grow that category. So to answer your question about how often we're going to be doing it, you will be seeing more drops more often from Funko as we continue to expand our world like you would expect from Funko. Everyone's a fan of something, so we have something for every fan. As we continue to expand that license portfolio, you will see us dropping NFTs more often across more and more licenses.
- If I've learned anything from covering Funko for some time, Andrew, it's you guys move very quickly to get product to market here. That's really-- I've always viewed as your secret sauce. I mean, to that point, have you seen any delays or new disruptions in the supply chain because everything we're seeing around the pandemic?
ANDREW PERLMUTTER: Yeah, that's a great question. You know, 2021 has been a tough year due to some supply chain disruptions. And I have to say that our team has done a fantastic job ensuring that we prioritize all the product to get here in time, whether it was seasonally related product that needed to be here in October in order to make sure that it was pretty much sold through in November. You know, like advent calendars. That was something that we definitely needed to prioritize.
Overall, I would say we've done a really good job ensuring that our fans and our customers had the products that they wanted when they wanted it. And right now we're in the last two weeks of the year. The last week before Christmas, the shelves are stocked with our product, so head out, check it out. We are really impressed with how we've handled it so far. And we're looking forward to it normalizing hopefully in '22 with our eye on the back half.
- All right, I'll leave it there. Funko's President and incoming CEO, Andrew Perlmutter. Good to see you. Stay safe out there. We'll talk to you soon.
