Multiple sources are confirming to Strata-gee that Nortek Security & Control (NSC or Nortek) is planning to shut down two of their brands – Sunfire and the once iconic Niles. The move is said to be the result of their relative under-performance as the company shifts its focus to the apparently more successful brands, such as Elan.
See more on the closing of Niles & Sunfire by Nortek
Strata-gee has closely covered Nortek and its once-independent AV holding company Core Brands for many years. I watched as they acquired some of the top brands in custom integration, particularly Niles, Xantech, and SpeakerCraft. Many considered these brands pillars of the industry – especially in those heady, high-growth, early days.
But under the more industrially-centric Nortek, over the years the innovative blood flowing through the veins of these top CI brands…slowly began to drain. Almost as though in slow-motion, we watched the business level and market impact of these brands – and their respective entity value – wither away.
COVID-19 Likely Did Not Help the Situation
Now, sources say the shutdown of these two brands is just the another step in the continuing decaying process – a process that is perhaps been turbo-charged in the COVID-19 impacted world.
Nortek is said to have notified top distributors and other key partners in recent weeks that these two brands are being discontinued. The specific timing of their closing is not clear at this point. Most likely, the timing is dependent on the level of remaining inventory of these brands.
At One Time, Ten Strong Brands
At its peak, Core Brands managed ten separate brands that specifically addressed the CI channel: ATON, BlueBolt, Elan, Furman, Gefen, Niles, Panamax, SpeakerCraft, Sunfire, and Xantech. While many of these brands were once major players in the CI channel, over time many of them began to lose momentum for a variety of reasons. But one brand countered that trend, Elan, which offers an effective midrange control solution that is said to have done well over the years.
Not helpful to the situation is when Melrose plc, a U.K. investment company, bought out all of Nortek. Melrose’s strategy is to buy troubled companies, improve their operations and finances, and then resell them at a profit. The problem for anyone working at a CI brand at Nortek is that Melrose tends to focus on large industrial companies…and not technology-related businesses.
New Owner Melrose is Focused on Heavy Industry
Melrose licked their chops at Nortek’s large industrial air-handling businesses, and turned their back on the security and technology related businesses. Cost cutting meant scaling back product lines, closing overseas factories to use OEM suppliers, cut headcount…and all of those other things investors do when cutting cost is the goal.
Core Brands went from being an independent entity under Nortek HQ, to ultimately becoming a small division under the Security business, creating a new Nortek Security & Control division. Now the CI brands which are largely AV centric products, report to the management which is all from the security side of the business.
The Red-Headed Stepchild
So at the end of the day, the CI brands are like the red-headed stepchild…not entirely welcome in the family. Or at least, not a focus of attention by big Daddy Melrose.
Calls to Nortek related representatives for comment on this story were not returned by the time this story was posted. If new facts emerge, this story will be updated then.
See more on Nortek at: nortekcontrol.com.
As a former writer for a major news organization, it would be good for you to avoid salacious innuendo and maybe focus on what’s real. The hyperbole in this article is KILLING me!! That anyone would take your word seriously is laughable. LOL, This article reads like a plot from All My Children. All I can gather from this article is that you must like to spread rumors.
Got a dangling introductory phrase there. Anyhow, “salacious innuendo” seems a little over the top. The article is mainly analysis rather than straight news. Ted has many years experience in A/V marketing and sales and knows the histories of these brands well, which is a key value of his newsletter. Although I don’t keep up very well anymore, I expect there must still be trades that lean more to straight news about the industry.
Ted is the only reliable outlet we have for news in this industry. While I respect most of the individuals at other publications, they all answer to where the revenue comes from and I believe that is not the reader. Those of us that have followed Ted and know him well can support that he does his “homework” and is far from irresponsible. Furthermore, I am responsible enough in my statements to list my full name.
I fully agree with Michael Riggs. The writer knows his way around Nortek, and I know that from first-hand experience having been a director at one of the brands he mentioned. His coverage was always analytical and well-researched, and his reputation was built on getting the story behind the stories and not simply recycling company press releases as so many other “journalists” did.
Based on the quality of your response and dependence on slang initialism to make your point, I can also see why you are a “former writer for a major news organization.”
The writer is correct about the closure of the brands, but not about the reason.
All the CI brands are in decline, these are just the first to go. Investors don’t close down profitable business, they cut dead wood. These won’t be the last brands to go.
Both Niles and Sunfire have been dead for a while…they just didn’t know it.
Sunfire unfortunately lost it’s fire and drive years ago. But in recent years they stopped policing the undercutting of prices by unauthorized dealers on the internet. I stopped selling Sunfire after that because every time I did, my customer would call me back to tell me the model that I had written up for (and which was supposed to sell for) $1100 was available all over the internet for $600. Or, the $1300 model was available for $700. Or a product that was supposed to sell for over two grand was available all over the place for just over one grand. I even called them and asked, “You’re not policing internet sales anymore?” and was told, “Sorry, not anymore.” Since their failure to do so made it no longer possible to make a profit on the selling of Sunfire products, I stopped even bringing the brand up to my customers and never sold them any longer. I’m sure most of their other dealers probably did the same thing as well. I realize that the wind was gone from Sunfire’s sails for quite some time before then, but with the utter failure to protect their product’s value to their merchants, they essentially committed an accelerated form of marketplace suicide. Just my own personal take on this company as a one-time happy seller of their higher-end products.
Sad to see Niles getting the axe. Those MANY customers with Niles Auriel solutions will not be pleased. I’m one of them. As I consider what to do next, I’m not so certain I should risk remaining in the Nortek/core brands family. Feels like I’ll just be screwed a Demond time in a few more years.