CEO of Funko, the Everett-based toymaker, steps down

EVERETT — Funko’s chief executive, Brian Mariotti, has stepped down to take a leave of absence.

Funko board member Michael Lunsfordwill serve as interim CEO while the company conducts a search for a chief executive.

“Brian has been the driving force of Funko for years and his contributions are found throughout the company’s product and retail innovations,” Chairman Charles Denson said. “I am thrilled that Mike can seamlessly step in, while Brian takes some time. We will continue evolving this fan-first brand for the future in a creative and meaningful way.”

Mariotti has served as CEO of the Everett-based pop culture toymaker since December 2022.

Before that, he was Funko’s chief creative officer from January 2022 through December 2022, and CEO from April 2017 through January 2022. He remains a board member.

Mariotti and a small group of investors bought the company in 2005 from founder Mike Becker. Mariotti expanded the toymaker’s portfolio of retro characters to include licensing deals for popular characters from comics, movies and TV shows. It’s signature line of Pop! vinyl figures, with oversize heads, big eyes and little bodies, first appeared in 2010.

“Funko has been my labor of love for nearly two decades,” Mariotti said in a statement.

“While I’m going to step away from the day-to-day business to recharge my batteries, I plan to stay active on our board,” he added. “I hope to come back and contribute to Funko again in new creative ways. I look forward to seeing our team and fans at San Diego Comic-Con next week.”

Lunsford joined Funko’s board in 2018, serving as chair of the compensation committee and a member of the audit committee.

It’s not the first time he’s been tapped to serve as an interim leader.

Lunsford previously served as interim CEO for EarthLink, an internet service provider, and RealNetworks, a Seattle-based pioneer in internet streaming software, Funko noted in a statement.

“In both instances, he adeptly navigated transitional periods,” the company said.

“In partnership with chief financial officer/chief operations officer Steve Nave, President Andrew Perlmutter and the leadership team, we will carefully guide the company’s efforts to grow profitability while continuing to delight our deeply connected fan community,” Lunsford said.

The toymaker drew scrutiny this year for a plan to dispose of thousands of the company’s plastic figurines.

Sales of Funko’s vinyl dolls and collectibles surged during the pandemic. But the temporary run on Funko Pop! sales apparently cooled, leaving the company with excess inventory. Mariotti told investors that the company will try to recycle as many of the toys as possible.

Also this year, the company faced a class action lawsuit filed by a Funko shareholder who claimed the vinyl toymaker wasn’t adequately prepared when it moved its distribution center last year from the Pacific Northwest to Arizona.

The lawsuit, filed in U.S. District Court, alleged the company failed to tell investors that it was experiencing significant delays in the rollout of a new software program, critical “to the efficient operation of its new distribution center.”

In 2022, the Everett-based toymaker issued layoff notices to more than 250 employees at warehouses in Everett and Puyallup and consolidated its distribution operations to a Phoenix suburb.

Funko’s headquarters and flagship store have been located in downtown Everett at 2802 Wetmore Ave. since 2017.

Janice Podsada: 425-339-3097; jpodsada@heraldnet.com; Twitter: @JanicePods.