UK: MY BEST DEAL - Bone transplant pays off - JOHN TAMS.

UK: MY BEST DEAL - Bone transplant pays off - JOHN TAMS. - Gerald Tams gambled - he bought out his cousins and moved up from earthenware to bone china to register a Five Towns success.

by Chris Blackhurst.
Last Updated: 31 Aug 2010

Gerald Tams gambled - he bought out his cousins and moved up from earthenware to bone china to register a Five Towns success.

When social historians review the last decade they will write about the suffering of Britain's traditional industries of iron and steel, textiles and pottery. They will focus on the deserted presses, crumbling mills and redundant kilns of South Wales, South Yorkshire, Lancashire and the Five Towns.

But they would be wrong to generalise: there are even now chinks of light piercing through the gloom. One of the brightest glimmers of hope is John Tams, the earthenware and fine bone china manufacturer. Founded by John Tams in 1874 in Longton, one of the Five Towns that form the Potteries, the company is enjoying the most prosperous period in its history.

Annual sales have risen from £11m in 1988 to over £20m in 1991. After declining to below 400 at the time of the last recession, in 1979, the pay-roll is now rising and currently stands at almost 1,000. Recent acquisitions of Duchess and Royal Grafton China have lifted Tams into the top five of UK pottery companies. Such progress has not gone unnoticed in the City. In July this year, while huge household names struggled to get their share issues away, Tams quietly raised £1.6m through a placing that saw its institutional shareholders more than treble, from three to 11.

The brains behind Tams' rise is Gerald R Tams, 53-year-old great-grandson of the founder. A modest, private man, he is happier talking about the problems besetting the ceramics industry - he is one of its most outspoken figures - and his collection of 10 Jaguar cars and "a Jensen FF, the first four-wheel drive model," than his success with Tams. He acknowledges that Tams, 70 per cent owned by himself and his wife Angela, "is one of the few family businesses left in the Potteries". Most have either become part of much bigger conglomerates or gone out of existence.

He was educated at Ratcliffe College in Leicester and after four years studying for a diploma in ceramics, joined the family firm in 1960 as a trainee. He started at the same time as his cousin Peter, and they were groomed to take over, which they duly did. But in 1984, Peter decided to retire to go into farming. Gerald, or "GRT" as he is known bought him out. For good measure, he also bought out eight other cousins as well, gaining 100 per cent control. It was, he admits, "a brave decision".

Tams was a sleepy, barely profitable company. Not surprisingly his cousins, who had not even received dividends before, were delighted to be obtaining a capital sum for their shares. In 1988 he took the company to the stock market. He followed that a year later, by what he describes as "the best thing I've ever done for the company," the purchase of Duchess China.

Until then Tams had specialised in cheap coffee mugs and other pieces of earthenware. Its most lucrative activity was supplying promotional mugs to the likes of the petrol companies for their giveaway offers and to chocolate-makers for Easter egg packs. But Tams was facing stiff competition from cheaper imports, mainly from the Far East. So he decided to diversify.

Duchess China, a local company was up for sale. It was owned by two brothers in their early seventies who wanted to retire. He paid them £3.2m and at a stroke, made Tams a serious player in bone china. He bought just before the onset of the recession and for a time it looked as though the deal would prove his undoing. But, remarkably, bone china is one of the few luxury products to have held up well in the downturn.

While earthenware has suffered, as companies have cut back on their promotional offers and the houseware market generally has declined, fine china is still selling well. Unlike earthenware, it is sold through specialist gift shops and department stores which have remained loyal to their suppliers. And, says Tams: "People still buy bone china for retirement gifts and wedding presents." Another factor has also helped. "Exposure on the Antiques Roadshow has made everyone realise what a valuable investment it can be."

In March this year, he acquired Royal Grafton, another famous china name, for a knockdown £937,000. For now, though, that is all the buying he intends to do. "Our main objective is to drive for organic growth in the businesses we've got," he says. "For a small management team to perform heroics is dangerous. We've got to be measured and considered in what we're doing and take things steady." That way, he reckons, once the economy improves, he can take annual turnover to £30m. Old John Tams would never believe it.

Chris Blackhurst writes on business for The Independent on Sunday.

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