I started out painting the outside of the box.
I didn't care about how the bottom of the box looked like but did a coat of paint anyways.
Next I cut strips of cardboard and made them fit so they could divide the box into fourths. I then pulled them back out.
Using scrap fabric that I cut into four squares, I took 4 cotton balls and made them into a big ball and then hot glued the fabric over the cotton balls. I repeated in all four corners.
Then I hot glued the cardboard back into place. After I put the cardboard in I realized that I need to cover the sides of the box in fabric as well. So I did some more cutting and hot gluing.
Here it is done. It's not super pretty but its still a nice place for his watches to go and not get scratched.