Shinola (retail company)

Shinola is an American luxury goods retailer based in Detroit, Michigan. It produces watches, bicycles, and leather goods, among other products. Founded in 2011, Shinola takes its name from the defunct Shinola shoe polish company. The company was founded by Tom Kartsotis and is owned and operated by Texas-based investment group Bedrock Brands.
History.
The original Shinola shoe polish brand was founded in Rochester, New York in 1877, and went out of business in 1960. The modern company was founded in 2011 by Tom Kartsotis under his investment company, Bedrock Manufacturing (now Bedrock Brands). Kartsotis, previously a founder of Fossil Group, wanted to create a high end American watch manufacturing brand to rival Swiss watchmakers at a lower price point. Bedrock decided to acquire the Shinola brand after an associate used the World War I-era expression "You don't know shit from Shinola" as a rejoinder to Kartsotis' stated ambitions for the company. Unexpectedly, the joke generated a serious discussion about restoring the Shinola brand. Market surveys established that when faced with a choice of paying US$5 for a pen from China, $10 for one made in the United States, and $15 for a pen made in Detroit, consumers would be willing to pay a premium for the last one.
Every Shinola product is technically assembled in the United States. However, many parts used in Shinola watches are manufactured in China and Thailand. These factories are owned by companies based in Switzerland. At the time of the company's founding in 2011, no American watchmaker had produced watches at scale since the late 1960s, with U.S.-based watchmaking relegated to select specialty companies such as RGM in Lancaster, Pennsylvania. Shinola's current tagline is "Where American is Made", and the company has actively utilized Detroit's reputation as a worldwide manufacturing hub in its marketing of the brand.
The company's headquarters and watch factory are housed within the College for Creative Studies (CCS) on the fifth floor of the Alfred A. Taubman Building in Detroit, a former automotive research lab. Shinola's occupation of the CCS space at first occurred by accident when Bedrock officials, seeking a manufacturing site after resolving to rebuild Shinola, visited the College and the elevator unexpectedly opened on the fifth floor, which was vacant at the time. They decided to transform the of vacant space into their watch factory and company headquarters. To build out the watch factory, the company partnered with Ronda, which also brought in expert watchmaking veterans to train Shinola's watch assemblers, all of whom had no prior experience in watchmaking. Currently, the factory has the capacity to finish the assembly of 500,000 watches a year.
Most of the workers assembling watches are local Detroiters, and many of them come from the auto business. Since the company's founding in 2011, it has grown to over 400 people by 2014.
Criticism.
Quartz movements.
Shinola has faced criticism for producing mostly quartz watches instead of mechanical or automatic self-winding movements found in nearly all higher-end luxury watches, which require substantially more skill to produce. In November 2017, the company unveiled its first mechanical watch, called the Lake Erie Monster, in response to public demand, crediting the delay to the time it took their Swiss suppliers to develop one.
Made in America marketing.
Detroit-based journalist Jon Moy has suggested that the choice of Detroit as the location of Shinola's factory was a calculated act of "opportunistic marketing" intended to yield feelings of nostalgia on a purchaser's part. He wrote about Shinola: "Shinola is using my city as its shill, pushing a manufactured, outdated and unrealistic ideal of America." On the other hand, many commentators to this article consider this criticism unfair, given that the company has created American manufacturing jobs. Moreover, the company has invested intensely in its employees, flying in watchmakers from Switzerland to train its employees. 
Alex Williams in the "New York Times" criticized Shinola's use of "Detroit" as a marketing tool. In an interview with him, Williams found that the goal of the company was not to be just another watch company, but a "job-creating vehicle" and because of Detroit's association with manufacturing. His job argument is a driving argument in support of the company. In an interview with the "New York Times", Carlos Quirarte, the cultural director, even states, "How would you want to hate on a company that is doing so awesome, creating jobs in America, where we really need it?” Kartsotis also claims that the marketing of a product is important because customers in the market today want to know where their products are coming from.
This marketing technique and Kartsotis's background have brought much criticism to the company. In 2014, men's style site compared Shinola to a "trust fund kid that decided one day he wanted to start a company and had his dad buy him all the cool stuff." And in 2013, the "New York Times", in a review of their new store in Tribeca, described Kartsotis as a "mid-price watch mogul looking to go luxury under the cover of charitable business practices".
Additional criticism is noted by Professor Rebekah Modrak in her article "Bougie Crap", for "Infinite Mile Detroit". She writes:
In June 2016, the Federal Trade Commission ordered the company to stop using "Where American is Made" as a slogan because "100% of the cost of materials used to make certain watches is attributable to imported materials." Today, some Ronda movements are labeled "Swiss Parts", meaning that most of the parts are made in Switzerland but assembled overseas. Such movements are nickel plated. Ronda movements assembled in Switzerland are gold plated and labeled "Swiss Made." Shinola movements are made of the same parts as the "Swiss Made" movements, but assembled in Detroit; they are gold plated. The dials, hands, cases, crystals, and buckles are manufactured overseas, as are such components of many "Swiss Made" brands, and Shinola claims the cases are made in the same facilities as many luxury "Swiss Made" watch cases are manufactured. The Ronda movements can be purchased by watch repair shops for $23 retail; however, it has been pointed out that Swiss Made ETA movements (used in many "Swiss Made" luxury watches) can also be purchased in bulk for around $20. Furthermore, while the standards for labeling a watch "American Made" is that nearly 100% of the parts must be physically fabricated in the US, the legal standard in Switzerland for "Swiss Made" is that no more than 40% of the "value" of the watch can be fabricated overseas. Since the cost of fabricating watch parts overseas that eventually end up in "Swiss Made" watches is much lower than fabricating them in Switzerland, its unclear if the "40% of the value" limitation is particularly meaningful.
Gentrification controversy.
Some have criticized Shinola for its role in gentrification in Detroit and alleged exploitation of the city. A "New York Times" article about the brand begins with Tom Kartsotis recalling the dire state of the Cass Corridor neighborhood, and his disbelief that a luxury store could succeed in the area. He even recalls himself asking, "You want to put a store here? You kidding me?" Some hail the addition of Shinola in the area as economic growth and increased safety, but others argue has changed the cultural fabric of the area. Rebekah Modrak, who used the term “bougie crap” to describe the company, asserted that Shinola “uses the design aesthetic of “calculated authenticity” and elements of hand-craft or personalization to suggest that the product is motivated by these values and not by crass economic gain.” Others, like author of the article “On Shinola, Detroit's Misguided White Knight,” have accused Shinola of disguising their furthering of gentrification in the city with claims of city pride. Jon Moy charges “Shinola and other entrepreneurs market themselves as white knights, swooping in to save the noble savages.” Despite all these criticisms, however, Kartsotis claims he is not in the business to make a profit, but rather to stimulate the local economy by paying workers, on average, $3 above minimum wage. 
A "Metro Times" article commented that Shinola had “seized scrappy Detroit’s comeback story,” which some have called capitalizing on Detroit’s poverty. Others take issue with Shinola’s marketing, specifically their promotional video “Shinola | A Snapshot of Life in Detroit.” Moy referenced alleged exploitation of Black culture, and that using “photos of adorable black kids with a beautiful, benevolent white woman seem to be the centerpiece of Weber's campaign for the company,” arguing that their marketing enforces their “white savior” image. This concept is not new to the city, however, with businessmen like Dan Gilbert also coming into the city with the intent to "revitalize" the once great city, but also receiving criticism from the residents of Detroit that argue the city was great without them.
Products.
Watches.
Shinola's first watch was released in March 2013. Produced in an edition of 2,500 and available in two sizes, The Runwell Limited Edition 47mm sold out in one week, with the last 40mm watch selling out in under two weeks. The watches sold for US$550, and approximately 35% of the sales came from Michigan.
In October 2013, Shinola released their second limited edition watch, The Wright Brothers Limited Edition watch, the first watch in the Great Americans Series, which was released in conjunction with a limited edition bicycle. The series has released subsequent watches honoring other Great Americans including Henry Ford (2014), Muhammad Ali (2015), Maya Angelou (2016), Jackie Robinson (2017), Statue of Liberty (2018) & Minoru Yamasaki (2019). The current watch in the series honors Motown legend, Smokey Robinson (2020).
In September 2014, Shinola released The Lattice, a limited edition wristwatch created in partnership with Oscar de La Renta. The 36mm women’s watch was manufactured in Detroit in a limited edition of 250. Purchase included a hardcover book created exclusively for the project which complements the timepiece by offering an in-depth look at Oscar de la Renta and his work.
In 2014, Shinola released The Black Blizzard titanium wristwatch in 48mm and 42mm as well as the next Signature Series limited editions watch, The Henry Ford Pocket Watch.
The company also produces a number of different watch styles on a non-limited edition basis, including The Birdy, The Gomelsky, The Runwell Chronograph, The Runwell Sport, The Runwell Sport Chrono and The Brakeman.
Bicycles.
Shinola bicycles include three models: the single-speed Detroit Arrow, the three-speed Bixby, and The Runwell with an 11-speed internally geared hub. All three bikes were designed by Sky Yaeger, formerly of Swobo, Spot, and Bianchi. The chromoly steel frames and forks are made by Richard Schwinn's Waterford Precision Cycles in Waterford, Wisconsin, with complete assembly taking place at Shinola's flagship retail store at 441 W. Canfield Street in Detroit.
In addition to The Bixby and The Runwell, Shinola produced two limited edition bicycles, including the Wright Brothers Limited Edition Bicycle and The Shinola Runwell Di2 Limited Edition, as well as a one-off Twinn Tandem bicycle and brass-plated Runwell bicycle.
Journals.
Shinola makes journals in partnership with Edwards Brothers Malloy, an Ann Arbor, Michigan-based company. The journals come with paper, soft linen or hard linen covers, with a price point of US$12-$20 for a linen covered journal.
Leather.
Shinola's leather goods and leather watch straps are made using leather predominantly supplied by the Chicago-based tannery, Horween Leather, which has been in operation since 1905. The tanning of the leather takes months, using a process that showcases the natural characteristics of the leather. Shinola leather watch straps were once made by Hadley-Roma in Key Largo, Florida, but are now produced at their factory in Detroit. A partial list of Shinola leather goods includes iPad and iPhone cases, wallets, portfolios, backpacks, and more.
In 2014, Shinola opened its own leather factory in Detroit, and has begun manufacturing leather watch straps under the leadership of Braloba, a Swiss-based, family-owned company run by Thomas Schori. The leather factory is equipped with custom-designed machines produced by Galli S.P.A. The company will also begin producing small leather goods and accessories in-house.
Shinola also sells watch straps individually; leather straps come from Hadley Roma in Largo, Florida and Horween Leather in Chicago, and rubber watch straps made in partnership with Stern Manufacturing of Staples, Minnesota. The company also revived production of shoe polish in 2013, albeit in a different formulation and tin can packaging.
Shinola Pet.
Shinola Pet is a collection of American-made dog beds, toys, leashes and collars, produced in collaboration with superstar photographer Bruce Weber. Shinola Pet supports the Michigan Humane Society and the Best Friends Animal Society in their mission to raise awareness about rescue organizations and to save pets by finding them homes. A portion of the pets toys are produced in partnership with Empowerment Plan, a Detroit-based charity organization that employs local women who are living in shelters, training them to manufacture sleeping bag coats for the homeless.
Retail locations.
In addition to the Shinola website, Shinola products are available for sale at flagship stores in Detroit, New York, London, Toronto, Highland Park, Plano, Minneapolis, Chicago, Boston, Los Angeles, San Francisco, Washington, D.C., and Cleveland.—each located in affluent shopping districts, and built out at a combined cost in excess of US$100 million. In 2015, an additional store opened in Ann Arbor, Michigan. A Willys Detroit, a sister store to Shinola, is a home for distinctive American brands.
Community involvement.
Shinola opened an off-leash dog park in partnership with Midtown Detroit, Inc. in 2014.
Notable customers.
Former President Bill Clinton bought 14 Shinola watches, calling the company an American success story. Other politicians have promoted the product, including former Michigan Governor Rick Snyder and former President Barack Obama. On April 22, 2016, President Obama presented United Kingdom Prime Minister David Cameron with a custom Shinola men's watch featuring the seal of the President of the United States engraved on the back, presented in a wooden Shinola box customized with the Presidential seal.