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Niles Targeting Growth Without Channel Conflict

5/05/2005 09:07:00 AM Eastern

Miami — Niles Audio launched a new product and distribution strategy that dedicates three separate product lines to separate distribution channels with margins customized to each channel.

The strategy, Niles said, will reduce the channel conflict that occurs when security and satellite-TV distributors and installers enter the custom-A/V market and when regional distributors seek a national footprint.

Three distinct product offerings — a new JobSite brand of basic distributed-audio products, the core step-up Niles brand and the new top-end Niles sub-brand IntelliControl ICS — will have their own “identity and unique distribution profile,” Niles said.

The core Niles brand of about 500 SKUs will be sold to dealers by independent sales representatives and by distributors, including Niles distributors affiliated with AVAD (Alliance of Value Added Distributors). Some of Niles’s AVAD distributors also operate separate independent-rep companies, but they will be “sensitive to not over-distribute” because they earn commissions on repped products, said EVP Frank Sterns. “The rep/distributor model is one that has worked well for Niles for over a decade."

The new JobSite Systems brand of basic distributed-audio systems is a new brand that won’t carry the Niles name or logo and will be sold primarily through non-AVAD security and satellite installers, two channels that Niles hasn’t pursued aggressively in the past. Niles is also considering JobSite distribution through phone, lighting, and electrical distributors.

Satellite retailers are looking for higher margin products to offset the low margins on shrinking plasma-TV tickets, Sterns noted.

JobSite is also available to national distributors, including Capitol Sales of Minneapolis and satellite-TV distributor DSI. “More distributors want a national profile,” Sterns said. Capitol Sales previously sold the Niles brand only in the Midwest region, although it wanted to go national with the brand, the company noted.

JobSite offers almost 60 SKUs of basic components such as custom speakers, speaker selectors, in-wall volume controls and in-wall IR receivers to control sources via handheld remote from other rooms. Distributors have been offering the products for several months.

IntelliControl products, which will bear both the IntelliControl and Niles logos, will be sold only through the company’s independent reps, including reps tied to AVAD distributors. The selection will feature more than 20 SKUs when launched during September’s CEDIA Expo. The Niles sub-brand will be authorized for sale separately to “top-tier Niles dealers” and not be available through Niles' wholesale distribution network, Sterns said.

The sub-brand will feature more than 20 SKUs in September and will include Niles’s first music server and first satellite radio sources, including a model that will distribute Sirius and XM programming separately to separate rooms. IntelliControl will use an Ethernet network with a proprietary protocol to distribute control and metadata, while music is distributed in analog form.

Currently, only one component, a home theater controller, bears the IntelliControl name.

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