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15 Minutes With…Jim Minarik, Chairman & CEO, DEI Holdings : Synergistically Separate

How DEI keeps the Polk Audio and Definitive Technology brands mutually supportive but distinct

January 2012 By Nanck Klosek

CustomRetailer: The Polk Audio and Definitive Technology brands have co-existed for several years within the DEI brand family, and have been successful at maintaining their legacy identities. Can you talk a little about their distinct identities?

Jim Minarik: We continue to be very committed to keeping the brands separate with everything that faces the customer. All of the product ideation and the customer-facing sales and marketing activities, whether consumer or trade, are all really separate. Both have their own product styling and signature technologies. And while both brands are focused on specialist distribution, including custom, Definitive is even more limited in distribution. In that regard, they are kept quite separate.

On the back end, we've certainly taken advantage of a number of synergies, including regarding distribution. There used to be separate distribution warehouses for all, and now we have two, one in Vista, Calif., and another one in Memphis, Tenn.; all our brands are in those centers and we can service both coasts in a very efficient manner. Certainly, the general overall financial side is consolidated—that's a big part of what DEI Holdings does, as the financial superstructure to all the companies under the umbrella.

In things like corporate governance, I'm the CEO of DEI Holdings, and I'm always looking at ways we can add other synergies. For any new key technology—such as very thin speaker design, both for Polk and Definitive for retail and custom applications, I've definitely had both engineering teams cooperate so that we're getting the best thinking and the largest group of minds focused on it. We share technologies across platforms where it's appropriate.

CR: What are the specific market targets for each brand, and talk about where the differentiations and synergies occur, in product design, engineering and channel distribution. How do they co-exist under the DEI umbrella in ways that don't interfere with their maintaining separate marketplace footprints?

Minarik: In general, Polk overall has a broader line covering a wider array of price-points. We go quite high with the line but also get into categories such as, for example, powered surround bars. For a lot of custom retailers doing second and third installations in a home, bedroom or den, powered surround bars are a popular solution. From the consumer's perspective, it's not expensive, it's easy to understand, and easy to add onto the equipment in their homes to augment their systems where they might live just with a flat screen if they didn't exist. Polk moved very aggressively in that area, starting at $1,200 retail, but now they range down to $299 retail for a powered surround bar with a wireless sub. Definitive makes soundbars today, but all are passive solutions requiring components to drive them.



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