The couple run Loungefly, a collectible fashion and accessory brand, owned by pop culture giant Funko — and business is good.
On Thursday, the company reported that sales of Loungefly-branded products soared 132% to $29.6 million during the second quarter. While Loungefly accounted for only 12.5% of Funko’s total sales, it is a fast-growing brand and has thrived even during the pandemic, thanks in part to Baca and DeSilva.
“I honestly think they could be as big as Funko one day,” Funko CEO Brian Mariotti said. “We are just growing leaps and bounds.”
Funko’s net sales rose 141% to $236.1 million in the second quarter from $98.1 million a year earlier. The robust revenue growth helped the company post net income of $20.9 million, or 34 cents a share. In the year ago period, it lost $15 million, or 30 cents a share. After adjustments, Funko earned 40 cents per share in the latest period.
Funko’s stock closed Thursday at $20.12, putting its market cap at $980 million. Shares are up more than 93% since January.
Because of the pandemic, Funko was forced to invest more heavily in its direct-to-consumer business. From April through June, these sales rose 190% and now make up 11% of all Funko sales. This online strategy has benefited Funko’s core line of collectible pop figures — which saw sales jump 137% during the second quarter to $185.4 million — as well as Loungefly.
Change at the top
Mariotti has been at the helm since he bought Funko in 2005 from founder Mike Becker. That will change on Jan. 3 when it he steps down as CEO and takes on the role of chief creative officer. Andrew Perlmutter, Funko’s president, will become CEO, and Mariotti will continue on Funko’s board.
As CEO, Mariotti acquired smaller companies in order to build out new retail opportunities, namely a Funko Games division, which creates board games, and Loungefly, which designs accessories, and now, apparel.
Mariotti said he tried to buy Loungefly for about three years before he finally struck a deal.
“I just saw this amazing small company putting out the coolest backpacks and the coolest purses,” he said.
Founded in 1998, the brand was bought by Funko in 2017. Baca and DeSilva joined two years later. The former is Loungefly’s vice president of sales, merchandising and business development, and DeSilva is creative vice president.
