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PAS.06.01.16.Daniel Wellington
Classic Warwick watch, with NATO strap, from Daniel Wellington Courtesy of Daniel Wellington

Classy Watches That Won’t Break the Bank

May 16, 2016

Every modern brand phenom has a well-crafted backstory. The birth of the affordable luxury watch is no different. In 2006, while visiting Australia, Filip Tysander became fixated on the hefty Rolex Submariner lashed to a simple striped band (a.k.a. the NATO strap) that a Brit was wearing. At the time, Tysander was selling neckties and plastic made-in-China Rolex ­knockoffs online, back in his native Sweden.

Inspired by his fellow traveler’s style, not to mention his elegant-sounding name (Daniel Wellington), Tysander tapped his Chinese connections, plunked down $15,000, and launched a line of simple, classic timepieces. In the process he hatched a new market for fashionable, affordable, and direct-to-consumer watches.

Launched in 2011 and priced between $139 and $299, DW, as the brand is commonly known, immediately appealed to the fashion-forward set. In 2014, DW says, it sold more than 1 million watches, generating $70 million in revenue; last year sales reportedly jumped to $220 million—with more than 4 million timepieces snapped up so far. DW’s watches are now sold at Bloomingdale’s and over 8,000 global retail partners.

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Inevitably, a swarm of fast-fashion horologists popped up. Many have turned to crowdfunding for financing. A random search on Kickstarter turned up 38 different campaigns under the “affordable, minimalist” watch category. Railing against the bloat of traditional retail, they’re also exposing the process of making a watch that sells for $500 but costs only $75 to produce. Says Emrah Yüceer, founder of the startup Greyhours: “We are branding luxury to be able to tell the truth and say that [our] watches are assembled in China, and [they’re] beautiful.” Truth has a value.

Affordable Luxe

Below are three companies that are helping redefine the market. (All revenue is self-reported.)

Brathwait

Automatic marron steel mesh watch Courtesy of Brathwait

Tagline: “Is it really a bad idea to sell at fair prices?”

HQ: Delaware and Oslo

Backstory: Ready for a big change after living through the Tokyo earthquake in 2011, Henrik Torp, 29, quit his banking job. Pooling $40,000 with two friends, Torp spent two years scouring Chinese factories before setting up shop. The brand’s name comes from 17th-century poet Richard Brathwaite, who wrote The English Gentleman. In April 2014, Brathwait launched online with two versions: a classic slim model and an automatic. Currently in the process of bringing new investors on board, Torp says he expects to reach $5 million in sales this year.

Distinguishing feature: Brathwait provides a complete explanation of the supply chain, illustrating how a similar timepiece bought at retail costs nearly six times as much.

Price: $150 to $359

Sales: In 2015, 10,000 watches sold; $1.5 million in revenue.

Leonard & Church

Barclay Black-Silver Watch Courtesy of Leonard & Church

Tagline: “Build it simple, beautiful, and fair.”

HQ: New York

Backstory: High school friends Jeffrey Leung and Christopher Chon, both 30, saw a business opportunity when they looked to buy watches for themselves after grad school. They tapped friends’ Hong Kong manufacturing contacts, invested $10,000, and spent a year working on designs. Before going to market, they launched a Kickstarter campaign. “We wanted to see if there was a demand,” says Leung. “If it didn’t work, we could just move on.” With a goal of $75,000, they raised $420,270 in about 30 days. In September 2015, Leonard & Church launched online.

Distinguishing features: A 10-year warranty and a nimble design cycle, introducing new models at a regular clip. Women’s, chronograph, and travel watches are coming.

Price: $95 to $145

Sales: Since September 2015, about 10,000 watches sold; more than $1 million in revenue.

Greyhours

Essential in white Courtesy of Greyhours

Tagline: “Timepieces built to last.”

HQ: Hong Kong

Backstory: French-born Emrah Yüceer, 30, spent 10 years with various brands manufacturing everything from robots to furniture in China before deciding to launch Greyhours in 2012. Yüceer and his three co-­founders invested $200,000 and cut out the middlemen, selling online only. In April 2014 they introduced two sleek timepieces: one black, one white. Committed to the direct-to-consumer e-tail model, Yüceer says, Greyhours is considering opening nonsale showrooms so customers can see and try on the product.

Distinguishing feature: Uses high-end materials, such as sapphire crystal, Italian calf-leather straps, and cases of brushed stainless steel and scratch-resistant diamond-like carbon (DLC).

Price: $250

Sales: In 2015, 4,000 watches sold; $800,000 in sales—­$2.4 mil­lion expected in 2016.

A version of this article appears in the June 1, 2016 issue of Fortune with the headline "New Wave Watches."

Correction: An earlier version of this story said Leonard & Church tapped manufacturing contacts in China. The watches are manufactured in Hong Kong. Fortune regrets the error.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

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