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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

Both companies have extensive lines of custom-installed in-ceiling and in-wall speakers. Definitive came out two years ago with the Disappearing in-wall series that is very slimline with magnetically attached grilles and more recently, this past year, Polk also added another line of custom products to their assortment.

Both companies are focused on custom. Polk overlaps quite a bit at the mid and higher end with Definitive, but Definitive tends to go somewhat higher in price-points, depending on category.

CR: Polk has recently entered the headphone arena. Talk about the strategy behind that move, and how it was decided to select the fitness niche in which to debut the product category.

Minarik: We started studying that market nearly two years ago, with a fairly large amount of research, and looked at who was where with solutions and branding messages. Focusing on performance and/or lifestyle, we constructed a grid, looked at it, and envisioned an area within the grid—high performance and active lifestyle—where there were some solutions but really nothing in the sports-performance area.

Since all the other areas were pretty heavily covered with multiple brands, we focused there, and our product development began. We looked at ways to keep the headphones attached to the ear during all sorts of athletic activity but also at how to get high performance and maintain durability—for example, we have a Kevlar-reinforced cord in every cable so they don't break, and we have moisture resistance built in. There was nobody in that quadrant then. [Eventually] there were others who launched in that quadrant, but as a result of our research, our UltraFit line is out now, and we're also, in the early part of 2012, adding models.

CR: Do you foresee Definitive entering the headphone category? If so, what niches are being considered, if any, for an appropriate entry venue?

Minarik: Without going into a great deal of detail, Definitive is definitely looking at headphones for 2012.

CR: For both brands, what product areas are being developed most intensively, and how does what is being worked on make sense in terms of what the 2012 audio consumer wants and needs?

Minarik: We've just made some organizational changes. At the holding company level, Kevin Duffy has been promoted to president of DEI Holdings, I also just became chairman while remaining CEO. The main reason is that we recently went through a transaction to go private. After having been public for the past six years, we went through the same challenges everyone who's been going through the recession did. We recovered nicely in 2010 and had good growth in 2011 in all the business units and we have new financial partners—Charlesbank Capital Partners.

Lots of what we have done we will continue to do, because it's working well, and on the audio side, we are intently focused on speeding up and improving our product development and our market capabilities in three areas: headphones, soundbars and personal audio product solutions covering an array of things like AirPlay and small Bluetooth personal-use solutions. We made the organizational changes so we could focus much more energy on those areas. Kevin is working with our existing Polk and Definitive teams on that.

CR: What potential do wireless and IP-based technologies hold for the Polk and Definitive brands, and what product offerings from them are the next logical steps for the marketplace in those arenas?

Minarik: Both Polk and Definitive already have wireless-ready subs and will be adding and continuing to invest heavily in wireless solutions. We also are really aggressively adding products in the Bluetooth and AirPlay arenas, as mentioned; those are going to be very important areas. CR



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