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Rusty tries to burnish its image with new lines and marketing

Irvine-based Rusty Apparel has overhauled its look with hopes of jump-starting sales and rejuvenating the brand.

The surfwear apparel maker recently hired longtime industry veterans Rick Lohr, vice president of men’s merchandise and design, and Mike “Shooy” Schillmoeller, brand manager and vice president of marketing, to give the men’s line a new edge and sharper focus.

“In the last year, we’ve pulled together a sense of where we’re going,” Schillmoeller said. “We’re taking (Rusty) in a new direction.”

The surfboard portion of Rusty’s business has long been considered the “Mercedes-Benz of the industry,” according to Schillmoeller. The company got its start in surfboards in the mid-80s, founded by President Rusty Preisendorfer, and has remained an industry leader.

But the men’s apparel has lost its oomph over the past few years. Global sales were reported at about $85 million in 2000. U.S. sales were about $60 million. But those numbers reflected much slower growth than the double-digit increases the company saw in previous years.

The product was “very commercial and unexciting,” according to Lohr.

“The stuff was selling,” Lohr said. “But there wasn’t a lot in the line to make you sit straight up and say, ‘Holy Toledo.’ ”

Plus, Schillmoeller said, Rusty had not reinvented its brand, which propels other successful youth brands forward and fuels excitement at the retail level where competition is fierce and space is limited.

Court Overin, group vice president of VNU Expositions, owner of Action Sports Retailer Trade Expo, said Rusty has been squeezed as big industry players like Huntington Beach-based Quiksilver Inc. and Billabong USA in Irvine have gotten bigger and newcomers like Hurley International and Volcom have come on strong.

“It was a bit tough for them,” Overin said. “But they’ve really got a strong group of people they’ve put together that can really drive the brand. Consumers still love the brand.”

Peter “PT” Townend, publisher of San Clemente-based The Surfing Group and former Rusty marketing director and global brand manager, said now is a good time for Rusty to update itself since the “playing field has changed.” He said Quiksilver is no longer the “behemoth of brands”,Billabong is right up there, too.

“The smaller companies have to be more aggressive and smarter to compete,” Townend said. “In these kinds of times, you have to have innovation and product that’s relevant.”

A big plus in Rusty’s corner is its roots, according to Townend.

“It has maintained a leadership position in the market as a surfboard for a long, long time,” Townend said. “That’s a strength that never goes away.”

Rusty has updated its logo with a “slicker, faster, younger, fresher look,” according to company execs. The company has done the same with its men’s apparel products, which they described as “innovative, sellable and youthful.”

Rusty worked closely with its sponsored surf and skate athletes to come up with the pieces, according to Lohr. The design team wears silver bracelets etched with the words “technology innovation commitment.”

“It’s our job to go out there and search for the newest, best and freshest,” Lohr said. “But technology and innovation are nothing if you don’t have the discipline to do it.”

Lohr said his staff concentrated on building better,not necessarily more,pieces.

“Each product has a number of hurdles to jump to make it,” he said.

So far, he said feedback has been positive from industry members, with a number of vendors indicating they may double their orders.

“It’s going to be easy for us to double in surf shops because the volume is smaller,” Lohr said. “The bigger challenge is to double our clients that are seven-digit accounts” such as department stores.

The bottom line, according to Schillmoeller, is “shops need to make money with our brand.”

Tony Cherbak, a partner in the consumer products group of Deloitte & Touche LLP’s Costa Mesa office, said by making design and marketing moves Rusty has admitted that “they may have taken their eye off the ball a little bit.”

But he said the brand is “very tried and true.” And he said with some attention to design and marketing “it’s reasonable to believe they can build their business back.”

Still, Cherbak warned the company may face challenges from retailers if Rusty products haven’t sold as well lately as they had in years past.

“But if the product is there and it’s well received than they’ll get additional business,” Cherbak said.

To bring attention to the changes, Rusty recently launched a new men’s advertising campaign, dubbed “Projector,” for an undisclosed amount. The surfwear maker worked with an undisclosed ad agency to develop in-store promotions, surf and skate print advertisements and new labels.

The ads are running in trade publications core to the skate and surfing industries, including Thrasher, TransWorld Surf, Surfer and Surfing magazines.

The campaign features a combination of lifestyle and action shots with Rusty’s sponsored surf and skate athletes. In the past year, Rusty signed three top names in the skate industry,Ed Templeton, Arto Saari and Bastien Salabanzi,to bolster its presence in that market. Its surf athletes include twin brothers CJ and Damien Hobgood, two of the world’s top professional surfers.

In the meantime, the Rusty Juniors line for women is moving ahead with changes of its own.

Kari Kramer, national sales manager and merchandiser, said the division just launched a new advertising campaign, with ads that are more sophisticated and glamorous than in years past.

The move coincides with Rusty’s plans to broaden its Juniors offering from board shorts, T-shirts and beach cover-ups to fashion-inspired pieces. The division recently hired a new head swimwear designer, Erika Marini, formerly with Quiksilver’s Roxy brand, and plans to inject more detail into designs.

“We’ll still cater to beach lifestyle, but we’ll offer that same girl a little more fashion,” Kramer said.

For instance, swimwear will have some denim fabrications and rhinestones. The fall line includes sweater coats and pieces with a Burberry plaid influence.

“Things that aren’t typical of a surf company,” Kramer said.

Rusty Juniors will also broaden its target market, going from 12- to 18-year-olds to 12- to 25-year-olds.

With new designs and a larger audience, the company hopes to jump-start sales that have slowed over the years, according to Kramer.

“We’ve continued to see growth in our juniors division. But the growth definitely wasn’t what it was for the initial years,” Kramer said. “It did slow a little bit.”

While it’s too soon to tell how the changes will pay off, Bill Holford, director of marketing, said the whole brand “reinvention” is already starting to trigger sales.

“It’s inertia,” Holford said. “Things are starting to move.” n

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