Rusty Shares The Details On Its New Licensing Company Happy Shovel, Headed by Charlie Setzler and Pat Magnarella
After Rusty announced in late October that it was parting ways with La Jolla Group, its licensing partner and distribution company for the past six years, the industry has been eager to learn the details behind the brand’s new licensing agreement and how Rusty will continue to grow under new company Happy Shovel.
Drawing off a long-standing relationship with music industry veteran Pat Magnarella, Rusty CEO Charlie Setzler was able to extend the business relationship and include Magnarella in creating Happy Shovel — the new licensing company for Rusty North America— along with surf industry veteran Michael Tomson, brand owner Rusty Australia, and two other partners, says Setzler.
“We needed some additional partners of like-minded individuals that could bring something unique to our business and the industry,” says Setzler. “Pat was the first person I thought of when we formed Happy Shovel. At first, I wanted his opinion and advice. When he said he wanted to be involved – it was music to my ears.”
We caught up company partner Magnarella and Rusty CEO Setzler to hear more about the Rusty brand under Happy Shovel, what this means for distribution, and the brand’s new headquarters that are in the process of being built in Laguna Beach.
How did you and Pat meet?
Charlie: When Rusty launched the Wired Series of hoodies with the machine washable headphones, we got the opportunity to collaborate with Green Day and do a special run of Green Day/Rusty hoodies. It was a great collab and widely successful. Pat is the manager of Green Day and through the collaboration, I got the chance to work with him. It just so happened that Pat surfs and was a huge fan of Rusty Surfboards too.
After the Green Day collaboration ended – Pat and I kept in contact and would talk surfboards and catch a surf. Along with music, Pat is really involved in art as well which is very interesting to me. He’s got his finger of the pulse of youth and pop culture. We’d grab some lunch and I’d bend his ear on music and what’s new in the art world. At the same time, he’d always want to know what was happening in the industry.
Pat, what was attractive about the Rusty brand for you, and what ideas do you have to grow the brand for 2014?
I first became aware of the Rusty brand in 1988 when I moved to Los Angeles from New York City. I moved to LA never being there before so it was a bit of a culture shock. At the same time my college roommate had moved to Leucadia, CA so I started to go visit him on the weekends to get out of LA. He was and still is an active surfer and has always had Rusty boards. That is when I really first started to surf and
I would borrow one of his Rusty boards. When I finally decided to move out of LA and move my family to North County San Diego 7 years ago, the first thing I did was go shopping for a new Rusty board since I could finally surf when I ever wanted. Itwas hard getting to the beach living in Hollywood. So when I first meet Charlie about doing the hoodie project with Rusty I immediately said yes plus the Green Day guys are big surfers so it was a perfect match. After spending time with Charlie and really getting to know the brand there was always something that just felt right about being involved. When the opportunity to get involved with Happy Shovel on the ground floor that was very exciting to me.
I think the way to grow in 2014 is really simple make amazing product that people want to buy. I really like that Rusty is just surf I think that makes Rusty different from the other brands.
Pat, your background lies within music industry, and you manage some well known bands. Can you give us a few more details about yourself and your career?
I started out like most people my age did in the music business, in the mailroom at a big talent agency. I started out as a booking agent booking US tours for bands. In 1990 I left the big agency I went to work for in LA and started managing bands. My clients include Goo Goo Dolls who were my first client 23 years ago, Green Day going on 18 years, The All American Rejects (12 years), and a new band out of LA called Run River North. I also have a record company called Adeline Records that we run out of our office in Encinitas, CA.
You launched an action sports division a while ago, too. What was your thought process behind that, and are you still managing athletes?
Pat: I did launch an action sports division about 5 years ago. We ended up representing a group of skate and surf athletes for a few years. I really like working with the athletes and the brands. However, it was a very inconsistent business so I decided to close it down. I do still work with a couple of athletes, we sponsor skater Steve Nesser on Adeline and I co-manage surfer Sterling Spencer who is not just an amazing surfing but I think could have a great future as a film maker.
You also represent artists, right?
Pat: We started our art division in 2008. Roger Klein who has worked with me for about eight years and who was an A&R executive at Epic Records came up with the idea. We manage the artists like we would manage any of our music clients. We nurture, protect, market, advise and have done all the shows for our artists ourselves instead of using galleries. Our clients include British painter CHARMING BAKER, New York based stencil artist LOGAN HICKS, English urban artist MISS BUGGS, English painter DAN BALDWIN, English photo-collagist RICHIE CULVER, California based artist BRETT AMORY, English artist D*FACE and famed film and music conceptualist CHRIS CUNNINGHAM, whose video piece ALL IS LOVE featuring BJORK is in the permanent collection of the Museum of Modern Art in New York.
The business is about getting the world to know the artists, and cross-promotional projects are big parts in raising their awareness. It’s been very successful and I feel that art, music, and surf definitely all goes together. We have done some cool collaborations with our artists and our music clients, and a few years ago our artist Logan Hicks designed the art for the US Open of surfing and The Hurley Pro.
That’s rad. Getting back to Rusty, where will the brand be based from here on out?
Rusty is moving back to the beach! We will be based in Laguna Beach and will be surfing every day!
Charlie, what will your role with the company look like moving forward?
My title is CEO but that just what it will say on the business card. I will be wearing many hats for a while including finance, operations, merchandising and especially sales.
What does the new license agreement mean for Rusty’s distribution? Any immediate changes in the brand’s retail base, etc.?
Charlie: Distribution will remain as it has been for the last year. We believe that you can have a healthy, profitable business with the specialty retailer as long as we provide a good brand story and point of difference in product.
Any changes in sales staff or other Rusty employees?
Charlie: There are no changes to the sales staff and we’ll be adding to the team internally.
How do you view the current state of the surf industry?
Charlie: I think the industry is going through its most dynamic time ever. Everything is in a state of flux…from the economy, to distribution and the changing ways of retail, media and advertising, even our consumer is evolving…it really is an exciting time. Our focus will be on making great product, delivering a consistent message with a point of difference. If we can do this – we'll be able navigate through the craziness!