Business

KC startup Niall is counting on an American watchmaking revival

Barron Link, a co-founder of Niall Inc., assembled a watch on Wednesday, Sept. 3, in his Kansas City office. The startup company aims to become a name in the luxury watch market, competing with the likes of Cartier and Rolex with products assembled in the Kansas City Crossroads.
Barron Link, a co-founder of Niall Inc., assembled a watch on Wednesday, Sept. 3, in his Kansas City office. The startup company aims to become a name in the luxury watch market, competing with the likes of Cartier and Rolex with products assembled in the Kansas City Crossroads. The Kansas City Star

Michael Wilson thinks it’s time to take a bite out of the Rolex pie.

Wilson and a handful of colleagues have formed Niall, a small Kansas City startup, to help revive American watchmaking, an industry that faded more than four decades ago when consumers flocked to Asian-made timepieces run by quartz batteries.

Operating out of a small cubicle in the Crossroads neighborhood, Niall is elbowing into a small but growing mid-luxury niche of timepieces built with mostly — but not all — American made parts.

Recent craft manufacturing trends for beer, wine and coffee provide a template for about a half-dozen small U.S. businesses that are resurrecting an American industry that basically died when Hamilton shut down its Pennsylvania factory in 1969.

Shinola, now the most widely known American watch brand, has a thriving factory in Detroit, employing 300 people who assemble models costing in the $500 range. Consumers are buying its quartz watches in boutiques around the country.

But Niall and the other U.S. craft watchmakers are aiming beyond batteries. They’re reaching consumers who revel in the revered Swiss watch movements sold by such international companies as Rolex, Cartier, Montblanc, TAG Heuer, Girard-Perregaux and Breitling.

The small American craft shops, with names such as RGM, Keaton Myrick, Devon, Kobold and Weiss, are selling automatic movement and mechanical movement timepieces costing four, five and even six figures. The four-figure market is Niall’s current niche.

Niall (pronounced Nile and named after a legendary Irish king in a nod to Wilson’s heritage,) has a $3,950 price tag on its debut watch, the Niall One, which uses a Swiss-made automatic movement. It’s a “self-winding” movement that keeps working through motion of the wearer’s wrist, as long as it’s worn regularly.

Wilson wants to develop his own mechanical movement timepieces someday, but for now he simply wants to get Niall’s foot in the door. And in the eternal optimism of fellow entrepreneurs, he believes buyers will flock to American-assembled watches again.

“U.S. watches are the wave of the future,” agreed Gary Borel, vice president of Jules Borel & Co., a Kansas City-based supplier that sells watchmaking parts and repair tools to the worldwide industry. “Swiss is the best, but there’s no reason we can’t restart this industry in America.…We’ll have American-made movements, no question about it.”

In the vanguard

RGM, a small shop in Mount Joy, Pa., that employs a dozen workers, started the American-made trend about seven years ago. Designer Richard Baugh says RGM customers wait for three months to up to year for their personally made watches, which sell for $7,200 to $125,000.

To date, RGM has been the only company selling totally American-made wristwatches, fabricating its own mechanical movements in-house. Niall, which uses a Swiss-made automatic mechanical movement, is “93.3 percent” American made, Wilson says, counting every bit part that’s domestically sourced.

“That’s an unusually high percentage,” said Joe Thompson, editor in chief of Watchtime magazine, a publication for watch collectors and fans. “But here’s the thing: A watch movement won’t work without a hairspring … and you’ve got to get them from Switzerland or Japan.”

The Swiss watch industry alone reported $23.3 billion in exports in 2013, largely because of its dominance in handmade movements.

Wilson and his associates realize they’re competing for attention with the watch bells and whistles offered by other companies. Apple this month unveiled a personal computer in a sporty-looking wristwatch, scheduled for sale next year. But the craft watchmakers are confident that, at $349, the Apple “smartwatch” will appeal to an entirely different customer from theirs.

For now, Wilson’s avowed passion for wristwatches and the financial support of some Kansas Citians — to the tune of about a quarter-million dollars — has him on a mission to simply get noticed.

The first few sales in recent weeks came largely through “guerrilla marketing” — getting the watch on the wrists of notable Silicon Valley venture capitalists and Hollywood-type stars. The timepieces got noticed and liked by others, and a handful of sales were made through http://niallluxury.com/.

“The last great American watch company was Hamilton, but it sold out to the Swiss,” Wilson said during a tour of his tiny wristwatch domain at 1810 Cherry St. “We want to build something of equal status.”

Building the watch

Barron Link slips on 10 “finger cots,” the rubber finger covers worn by watchmakers to prevent touching the watch parts. He bends low over a black neoprene-padded workbench and pulls tiny screws from a drawer, meticulously inserting and turning them to settle the Niall One components in place.

Niall One developers, working out of a Crossroads startup lab with other business developers, are particularly proud of their watch part that consumers typically call the crystal. Niall worked with Corning to top its watch faces with shatter- and scratch-resistant Gorilla Glass, the product Corning originally created for iPhone touchscreens.

At the workbench, it takes Link about two hours to build the watch and attach its leather wristband. Niall’s production rate would be about 10 timepieces a day when both he and Wilson are assembling, he says.

For now, the company is producing only men’s wristwatches with black or brown leather bands. The watch bodies, with clean-looking faces and Roman numerals, come in stainless steel or “stealth black.” There are small windows for the day’s date to appear.

Link, together with Mark O’Renick, Dan Salva, Mark Shrout and Brett Simpson, teamed with Wilson to invest time or cash in Niall. Link and Wilson are the watch assemblers — when they’re not working at their “real” jobs in a work arrangement that has eased the Niall startup.

“We haven’t had to worry about some of the typical startup money problems,” Wilson admits.

That’s because the Salva O’Renick advertising and marketing agency employs them and provides them space in the agency-sponsored Ingenology startup lab next to the agency’s office. Other early-stage enterprises share that half of the Salva O’Renick building.

“Some we just provide space for, but this is one we’ve put money into,” O’Renick says of Niall. “We’ve validated that we have a good brand story that is resonating well. American manufacturing isn’t the easy path, but people are rallying around that, and the product design is getting good reviews.”

Wilson says Niall aims for resonance “as the watch people earn — not the watch people buy.” But buy consumers must if Niall is to succeed, and industry observers give it fighting odds.

Tapping the market

“Even in the recession, the top luxury market never died. The $10,000-and-up market was recession proof,” says Watchtime’s Thompson. “And since the recession, all luxury watches globally are coming back. The $5,000 to $10,000 range, with Swiss goods, on the whole has recovered pretty well. The $1,000 to $5,000 market is a little tougher, but gradually picking up.”

Thompson says “tapping into the American-made zeitgeist” may help propel Niall sales, “but to induce people to spend $4,000 on a brand they’ve never heard of … it takes time.”

The Watchtime editor points to his successful magazine and to the plethora of luxury watch ads that dot other magazines and The Wall Street Journal: “There is an audience for this product. Our magazine exists strictly because expensive watches have become boy toys. It’s like car magazines. Guys like the technical stuff; they want to know what’s under the hood.”

Furthermore, he observes, “Watches are the jewelry men can wear, and there’s an audience of men who want luxury wristwatches and will take a chance on brands they don’t know.”

So far, Niall has four designs for men, but Wilson says he wants to develop women’s models, too.

Niall founders know they need savvy marketing and luck to capture market share in the growing American market. Wilson reached out to the Kansas City entrepreneurial community earlier this month in a 1 Million Cups presentation at the Kauffman Foundation. One of his first questions from the audience was from a man who proclaimed himself a Rolex devotee unlikely to change loyalty.

Thompson, the watch magazine editor, says he’s been covering the watch industry for decades, and he’s seen a lot of broken hearts connected to new ventures. Borel, the watchmakers’ supplier, sounds more optimistic.

“You’re not really buying a watch. You’re buying a feeling,” Borel said. “Human beings desire things. $3,800 may be an expensive watch for my world, but when people fall in love with things, they often figure out a way to buy them. And if you like the idea that it’s made in Kansas City, well, that’s great.”

To reach Diane Stafford, call 816-234-4359 or send email to stafford@kcstar.com.

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