Despite Arizona move, Everett leaders expect Funko HQ to stay

EVERETT — Collectible toymaker Funko will stay rooted downtown, even as distribution operations move to Arizona, city officials say.

On Thursday, the company told employees of its Everett warehouses that it would be shifting their work to Buckeye, a suburb of Phoenix.

But Funko recently expanded its corporate footprint in Everett, leasing another building across the street from the headquarters at 2802 Wetmore Ave., said city spokesperson Julio Cortes.

Dubbed “HQ2,” the new facility will house the creative, product development and marketing teams, Cortes said in a statement.

“Funko’s decision to move some of its warehouse operations into a single, low-rent Arizona warehouse is a clear indication of its anticipated sustained growth,” Cortes said. “Funko’s headquarters is and will continue to be in downtown Everett, and we are witnessing Funko’s growth firsthand as it hires positions across all sectors of its operations.”

Funko is known for pop culture-inspired vinyl figures, with signature oversized heads and wide eyes. The headquarters and flagship store are considered cornerstones of downtown Everett by local business leaders.

In October, the company leased an 863,000-square-foot warehouse in Buckeye, according to a report by the Phoenix Business Journal. The company reportedly plans to employ about 360 people at the site.

Warehouse employees in Everett have until Friday to let their supervisors know if they’re interested in moving to Arizona, a company executive told staff Thursday in an audio recording obtained by The Daily Herald.

In all, the company will vacate five Washington warehouses, including four in Everett and one in Puyallup, Vice President of Operations Alex Poole told the workers.

The transition will begin in April and continue through 2022, Poole said.

“Over the last several years, the tremendous growth of the business has required us to open multiple warehouse locations, and we have now outgrown this footprint,” he said in the recording. “Consolidating our operation from five buildings to one will create many operational efficiencies. The Buckeye facility will allow us room to grow and will support our ever-important e-commerce and direct-to-consumer businesses.”

The Arizona site also “provides a better geographic location to serve our U.S. customer and consumer base more effectively,” he added.

Employees were advised not to respond to press inquiries and told to forward all questions to the company’s public relations team.

A few workers reached out to The Daily Herald following the announcement on Thursday to express their concerns. Some were blindsided by the decision. A spokesperson for Funko confirmed a meeting took place on Thursday to inform employees of the news.

“Transfer offers of employment will include relocation packages,” Poole told warehouse staff. “And for those who are not interested or unable to move at this time, we will be offering severance packages for eligible employees who remain through their job elimination date.”

“Our goal is to communicate specific dates to you as soon as possible,” he said. “Please know that you will be receiving at least 60 days’ notice of your last day of work once it has been determined.”

Last year, Funko reported having more than 600 employees in the United States, with the majority of its workforce in Everett. In addition to the Puyallup warehouse, it also has two locations in California and a few more facilities in the United Kingdom, according to its most recent annual report, filed in March 2021.

Funko’s products are manufactured in Vietnam, China and Mexico, then shipped to the United States, mostly to Everett, where they are stored and sent to customers, according to the annual report.

The Port of Everett does not traditionally handle consumer goods, so the products arrive in Washington through Seattle and Tacoma.

“Losing this many warehouse jobs and associated trade hours by the cargo shift to another state is unfortunate,” Port of Everett spokesperson Cat Soper said in an email, “but with the high demand for warehouse and manufacturing space, we are hopeful to see jobs and economic opportunity restored quickly.

The company was founded in 1998 in Snohomish by Mike Becker. Bobbleheads and coin banks based on cereal advertising mascots and retro characters were among the early products.

In 2005, Becker sold the company to Brian Mariotti, who expanded the portfolio through licensing deals for popular characters from comics, movies and TV shows.

Twelve years later, Funko went public on the Nasdaq Global Select Market under the stock symbol FNKO. Shares of Funko closed at $16.93 Monday.

Last fall, Funko reported third-quarter net income of $18.4 million, compared to $15.6 million in the same period the previous year.

Andrew Perlmutter took over as CEO this month after Mariotti announced he was stepping aside to become the firm’s chief creative officer. Mariotti continues as a member of the board of directors.

Herald reporter Janice Podsada contributed to this report.

Rachel Riley: 425-339-3465; rriley@heraldnet.com. Twitter: @rachel_m_riley.