Major investor banks on Towson-based watchmakers

The venture capital arm of Plank Industries is buying 25 percent of Towson Watch Co.

Fate introduced Czech-born George Thomas and German-born Hartwig Balke at an Irish pub in Annapolis in 1997. They found out they both owned sailboats, spoke fluent German and were men of business — Thomas as a chemical executive and Balke as the president of a company that makes hoists, cranes and other heavy-lifting equipment. They also lived near each other — Balke in Towson and Thomas in Lutherville.

But that wasn't all they had in common.

"I looked at his wrist. 'Nice watch,'" Balke said. "He looked at mine. 'Nice watch.'"

It turned out both men shared a love of horology, the art of making watches and clocks. They became friends and, three years later, as Y2K menaced with ill-founded fears that all computers would crash at the dawn of the new millennium, they decided the time was right to go into business together.

"Let's do it," Balke told Thomas.

"And we've been doing it ever since," Thomas said.

The self-taught watchmakers have quietly built their business, Towson Watch Co., into a small but prestigious player in the watch industry. They design and restore high-end timepieces that they describe as "mechanical treasures" — including one worn by Abraham Lincoln. They say their watches rival some Rolex, Breguet and Vacheron Constantin watches.

"Our watches are better quality in certain models," Thomas said.

Now, Balke's and Thomas' time has come. Towson Watch Co., which is somewhat obscure to the general public, has drawn the interest of a big-time investor. Sagamore Ventures, the venture capital subsidiary of Baltimore-based Under Armour owner Kevin Plank's Plank Industries, said earlier this month it has made a cash investment of 25 percent in the company, with the option to purchase it over time.

Balke's house in Towson's Fellowship Forest community is the company address listed on his business card. From his basement filled with lathes and other precision equipment, Balke designs watches with intricate movements, then sends the specifications to Swiss and other European companies. The watches, which are made in the pair's basements based on those specs, sell for thousands of dollars, to people who "want something special that nobody has," Balke said.

In a sense, working with watches isn't so different than the lifting equipment that Balke, 73, oversaw as the now-retired president of JD Neuhaus, a European company with U.S. headquarters in Sparks.

"It's a piece of machinery, just on a smaller scale," he said.

Heart and soul

Watching Balke work in his basement last week, Thomas showed an EKG monitor that tests the balance of movements and other functions of watches.

"Watches have a heart," Thomas observed, "and we check them."

Thomas, 85, has been restoring watches since 1948. He focuses more on meticulous repair work; he too works from his basement, which is similarly equipped.

"We're two guys with two basements," Thomas said, adding that his work space is smaller than Balke's, but not by choice.

"I lost that fight with my wife. He didn't," Thomas said.

Balke and Thomas make 60-80 specialty watches a year for their Chesapeake Class Watch Collection, many of which are inspired by famous ships and aircraft with regional connections, such as the space shuttle Endeavor and the sailing ship, Pride of Baltimore II. Towson Watch Company sells its watches only online and in three stores — Smyth Jewelers in Timonium, Little Treasury Jewelers in Gambrils, and Grenon's of Newport, in Rhode Island.

German physicist Gerhard Thiele wore one of the company's early "wrist chronometers" aboard the space shuttle Endeavor in 2000. The company has also restored watches worn by Lincoln and George Washington.

In 2009, the Smithsonian Institution's National Museum of American History tapped the watchmakers to repair Lincoln's gold pocket watch. They had to make a special tool to get the pin out. Inside the outer case of the watch were political messages engraved by two Civil War-era watchmakers who had worked on Lincoln's watch, one a Lincoln supporter and the other sympathetic to the Confederacy.

Towson Watch Co. has also restored the world's oldest watch (500 years) and smallest, a pocket watch at the Smithsonian Institution that Balke and Thomas said is 1.5 times the size of a pea.

Despite its cachet, the small company, for which they also design their own catalogs and do their own photography, has been largely overshadowed by companies that mass-produce upscale watches.

"We don't aspire to that," Thomas said.

"We serve a niche," Balke said.

They even made a replica of an 1805 Breguet, "just to show that we could do it," Balke said.

"Just for ourselves," Thomas said. "Sunday afternoon fun."

Timing is everything

Towson Watch Co. has been on Sagamore Ventures' radar since 2014, since managing partner Demian Costa admired one of the watches at Smyth Jewelers and kept the company in mind as a possible investment opportunity. Last year, Costa tracked the company to Balke's house with the help of a friend, who was a police officer.

The officer knocked on the door and apologized, "I think I have the wrong address."

For now, no major changes are planned, other than "a hire or two in the next year," said Tom Geddes, chief executive officer of Plank Industries. "It's going to be an evolution, not a revolution. We're already working with them on a branding plan."

Thomas and Balke hope to step up production to 300 watches a year eventually. "It's sort of a number we have in our heads," Thomas said.

But the main benefit, they said, is that Towson Watch Co.'s future is secure. They had talked of liquidating the company because they were getting up in years and their children had no interest in taking it over.

Now, they don't have to worry about that. Thomas said they know a good watchmaker who is ready to step in "when it's beyond our capabilities," and are talking to engineers about making watches locally, not just designing them and sending the specs overseas.

"This is our goal, to start making our own movements," Balke said. When asked if they are afraid of losing control over their products, Balke jerked a thumb toward Geddes and said, "Quality is our main concern. We will watch this guy."

"The company is going to continue for a long time," Thomas said, as Balke pumped his fist in the air. "The brand is going to go on after our kids put flowers some place."

"This company is their baby," said Geddes, who sealed the investment deal over dinner at the Baltimore Country Club at Five Farms. "Working with us, we think it can be their legacy."

Geddes has already put his own money where his mouth is. He paid $3,850 for a Pride II watch, which is shaped like a ship's bow.

"We were already working on a partnership, so I felt like I should eat the home cooking," he said.

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