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Nortek To Realign Home- Tech Brands Into 3 Groups

5/24/2012 03:08:14 PM Eastern

Carlsbad, Calif. - The new Nortek group that consolidates
the company's AVC Group brands with the previously independent
SpeakerCraft/Proficient and Panamax/Furman brands will realign all nine brands
into three business groups to reduce product and R&D duplication and deliver
programs with higher impact, a group executive told TWICE.

Five years ago, all of the brands were expanding their
product selections to become one-stop shops, but because the market has turned
down, all brands "need to focus on the things they're really good at," said Elan's
Paul Starkey, who will direct marketing for the as-yet unnamed group. "We
started to perfect that with the AVC Group model, and now it will be more
obvious."

The AVC group was formed in 2010 to consolidate the Nortek-owned
Niles Audio, Elan Home Systems, Xantech, Aton and Sunfire brands under one
roof. Now AVC will be consolidated with the Nortek-owned SpeakerCraft/
Proficient and Panamax/Furman brands.

With the latest consolidation, all of Nortek's
residential-focused electronic brands will be under one roof.

Under that roof, Nortek will create three business segments: power and accessories, which consists of select products from Panamax, Furman
and Xantech; control and electronics, which includes Elan, select Panamax
products and Panamax's Blue Bolt brand; and audio, comprising the
SpeakerCraft, Proficient, Sunfire and Niles brands.

For marketing, the business-segment directors of each group
will report to Starkey, who will be responsible for executing marketing strategies
and delivering products and programs to sales teams headed by Dave Keller. Reporting
to the business-segment directors will be product and brand managers for the
different brands.

For SpeakerCraft/Proficient, Proficient's Keith Marshall
will remain in charge of developing marketing strategies, and Starkey will
execute them.

The new reporting structure will eliminate the three brand
president positions under which the AVC Group previously operated.

The rep companies used by SpeakerCraft/Proficient and Panamax/Furman
will remain in place. "We don't anticipate short-term changes," said Starkey.
Late last year, all of the AVC Group brands began sharing the same rep
companies.

As for potential staff reductions arising from the
consolidation, Starkey said "eliminating jobs is not the driving element"
behind the restructuring, saying that all operating units are profitable. The
main driver, he said, is to "spur more innovation," explaining that brands
acquired by Nortek over the years duplicated efforts and were in a "maintenance
mode of product development." Now the combined companies have "an opportunity
to innovate and create a better value for dealers," he said.

As for layoffs, "we have not gotten to that level" of
decision making, but he said there would be job-shifting and, in a couple of
"key areas," new hires.

The headquarters of the unnamed group will shift to
Petaluma, Calif, where Panamax/Furman has its headquarters. Bill Pollock,
president of Panamax/Furman, has been named president of the new group.

The new group will also retain its presence in Carlsbad,
where AVC Group was headquartered.

AVC Group president Mark Terry will leave the company. SpeakerCraft
president Jeremy Burkhardt announced
his retirement
earlier this week.

 The group said no changes "are currently
planned" for existing dealer contacts, customer service, tech support and
credit operations.

 "We've joined the expertise and efficiency of
the industry's most important technology brands and formed a new resource for
our dealers that represents a unique opportunity for them to grow both ROI and
competitive standing," said Sean Burke, group president of Nortek's technology
products segment. "By synergizing the benefits of our brands under one
centralized group, additional resources can be better allocated to product
development and marketing."

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