Funko gearing for move to bigger digs

Pop culture fans, collectibles craze fuel sales boom

SEATTLE -- If the plan for a new headquarters for a pop-culture collectibles company comes to fruition, drivers rolling down Wetmore Avenue in downtown Everett will soon see colorful 8-to-10-foot statues of Spider-Man, Batman and other familiar characters looming over them from a skybridge and the ledges of an adjoining building.

Everett-based Funko has been growing rapidly and has its eyes on a potential initial public offering of stock, all while it plans its new base.

"We want you to drive by the building and say, 'I've never seen anything like that before,'" said Brian Mariotti, Funko's president and chief executive officer.

Since its founding in 1998 as a nostalgia-tinged bobblehead company based in a Snohomish home, Funko has grown into a $400 million business, annually producing about 100 million vinyl figurines, action figures, bobbleheads and other collectibles. All are made under licenses from some of the biggest names in pop culture, among them Disney, Marvel, Lucasfilm, Warner Bros. and DC Comics.

Along the way, Funko has become a force in the surging pop-culture collectibles market, selling fans stylized, adorable versions of characters from their favorite movies, TV shows, comic books and other entertainment.

It's amplified collectors' enthusiasm by cultivating community, both through in-person gatherings and regular interactions with enthusiasts on online forums and social media.

"Funko identified a trend in pop culture as a whole, and then aggressively went after being a bigger player in that," said Mariotti, whose office is lined with shelves full of colorful figures, most from his personal collection and familiar to those raised on after-school and Saturday-morning cartoons.

Mariotti says the company expects $425 million in sales this year, up from from $274 million last year, $107 million in 2014 and $40 million in 2013. He said the privately owned company is "highly profitable" but wouldn't be specific.

Funko's products, manufactured primarily in China and Vietnam, are designed in Everett. They're also marketed and shipped from the city, where the company has 380,000 square feet of warehouse space spread among three buildings.

Funko figures are now sold at big-box stores such as Wal-Mart and Target, mall specialty stores such as GameStop and Hot Topic, online retailers including Amazon.com, and numerous small comic-book shops.

The company's employee count is up from about 175 a year ago to about 300 now, and it's still hiring.

Early next year, Funko plans to move from its current 30,000-square-foot headquarters in an Everett business park to the downtown Everett space, three times that size, that most recently housed Trinity Lutheran College.

There, the company will open its first retail store, planned for 10,000 square feet, with an additional 2,000 square feet for a museum. On the outside, among the other oversized Funko-ized figures, will be company mascot Freddy Funko.

It's a long way from Funko's early days. Founder Mike Becker wanted to buy a coin bank of the restaurant icon Big Boy but didn't want to pay what collectors were charging. So he licensed the rights to make it, along with bobbleheads of Big Boy and other nostalgic characters, thus launching Funko.

Mariotti and two silent partners bought the company from Becker in 2005. Becker still works for Funko as vice president of apparel in its San Diego office.

An avid collector who once financed the purchase of his house by selling his Pez dispenser collection, Mariotti immediately looked to expand the company's licensing portfolio and to move beyond bobbleheads.

The idea for Funko's best-known, best-selling Pop! line came in 2010, when DC Comics was interested in a non-bobblehead line. Mariotti and a Funko artist designed a figure with big, round eyes peering from an oversized, square-ish head atop a small body -- fun, whimsical and cute.

When they introduced the figures at San Diego Comic-Con that year, they noticed a departure from their typical demographic of "males who over-index on collecting," Mariotti said. The figures attracted women as well as men, and fans of various ages.

Combining a wide variety of licenses with its stylized Pop! figure design proved to be the basis of Funko's growth. It's given that look to collectible versions of everyone from Star Wars and Golden Girls characters to National Football League players and even Hillary Clinton and Donald Trump.

At any given time, the company has about 175 different contracts encompassing some 10,000 characters. With the licenses, the company is able to seize on the proliferation of content online, on movie and TV screens, and elsewhere.

Funko's cultivation of community -- in person and online -- also paid off as geek became chic, and people online shared their enthusiasm for their favorite shows, movies and characters, along with their latest collectible acquisitions. It didn't hurt when celebrities started posing with their Funko likenesses.

Pete DeYoung, a neonatologist from San Antonio who has collected about a thousand Funko products, mostly Disney, said, "With collecting, people underestimate the community. Especially when you look for exclusive items, you build relationships and friendships. Over time, that's what keeps you going [with collecting] as well."

DeYoung has attended Funko Fundays, an annual gathering for enthusiasts that the company typically holds coinciding with San Diego Comic-Con. And he's a moderator of the Funko Funatic forum, one of many online venues for Funko fans. Funko executives interact with collectors on the forum, which the company supports but doesn't own, as well as on the company's own Facebook, Instagram and Twitter accounts.

Sean McGowan, who spent 30 years as a toy-industry analyst, estimates that the collectibles market -- by which he means relatively inexpensive and small items that older kids and adults want to buy in multiples to display -- has been growing 25 percent to 50 percent annually for the last several years.

SundayMonday Business on 12/25/2016

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