Funtastic chief executive resigns

Toy distributor Funtastic's (FUN) chief executive Stewart Downs has resigned, while the group has cut its full-year earnings guidance due to weaker-than-forecast sales in the US and Canada.

The group now expects full-year earnings before interest, tax, depreciation and amortisation of $10 million to $12m, prior to asset carrying value adjustments, down from previous guidance of $19m to $23m.

Funtastic said sales of its Chill Factor product in North America have been slower than expected due to cooler than average weather and a slower than anticipated full distribution capability.

The group also said sales in Australia were softer than expected, with its margins negatively affected.

Funtastic has promoted Nir Pizmony to chief executive, after his role overseeing the group's international division.

Chief financial officer Grant Mackenzie will take on the role of chief operating officer as well as his current role from August 1.

The distributor said it has started an aggressive clearance plan to reduce non-core, slow moving and obsolete stock, which will result in an adjustment to its inventory's carrying value of $3m to $6m, separate to the earnings guidance, with warehousing and logistics costs set to be materially lower in future. 

Funtastic said it remains confident in its strategy of developing its brands globally. 

The sale of its Madman business is set to proceed as planned and be completed by the end of fiscal 2014, Funtastic said.