Tom James Company
Employee ownership built into the fabric of a successful business
A story about Tom James Company
Spencer Hays, the founder of Tom James Company, learned his love of finely made clothes from his grandmother, who was a seamstress. While living in Nashville, TN, in the 1960s, Hays found that when he wanted to purchase clothes for himself, the salespeople were not well-versed in menswear and the whole experience was disappointingly impersonal.
Hays imagined a business where your relationship with the person selling you your clothes was as long-lasting and significant as your relationship with your doctor; where expert salespeople went to meet their customers at their homes or offices, got to know their tastes and wardrobes and gave them personalized recommendations that evolved over time along with their relationships. Then he set out to create it.
In 1966, Hays launched Tom James Company. Today it is the largest custom clothing firm in the world, with more than 3,000 employees working in over 100 offices around the globe. And it is proud to be 100% employee-owned.
It’s better to give than to receive
Hays’ grandmother taught him a lot of wonderful truths and life lessons. But one of them was that it is always better to give than it is to receive. That simple, yet powerful principle guided the way Hays treated his employees as he grew the company, and it ultimately led him to his decision to share the ownership of Tom James with the employees.
“It was really from that very simple foundation that Spencer decided that he was going to give away the ownership of Tom James—to his employees,” explained Todd Browne, CEO of Tom James Company.
Browne joined the company in 1990. “I would say more than anything, it was our principles that attracted me. And I would say the relationships as a result of employee ownership are what has kept me here,” he said.
A passionate leader, Browne is quick to share how important and impactful the employee-owners are in running the business. “As fellow owners, we’re all partners in this business,” he said. “That has cultivated an environment of people wanting to help each other. We’re not competing against each other. Our folks celebrate each other’s successes and how they bridge the gap in times of trial. They want to share the successes and best practices they’re employing themselves with others so that they can then have the same success.”
100% of Tom James Company’s stock is owned by its employees. Stock offerings are made available based upon each employee’s level of productivity, leadership and responsibility, and the company matches purchases with additional stock options. Any employee can request to buy stock in addition to, or outside of, the traditional framework.
The annual stock price is determined by an internal Board of Directors who meet twice a year to go through extensive financial valuations and then compare their value to four or five competitive companies in three closely-related business sectors.
One of the key benefits of employee ownership is its power to boost worker retention. Offering every Tom James salesperson the chance to own a piece of the company has allowed them to build relationships with clients that in some cases have lasted for decades.
“Our tagline at Tom James is, ‘We come to you,’” Browne said. “The purpose of clothes is how they make you look and how they make you feel. And if you don’t have both, it’s not worth anything.”
Adapting during the pandemic
“If there was any type of a potential storm that would have caused Tom James to not be able to make it, it would have been the COVID pandemic,” Browne said. “But not only did we make it, we’re doing better than we ever have. And it truly is because we don’t have employees–we have owners. And they just dug in to help us adapt at a very challenging time.”
The employee-owners at Tom James launched its reimagined women’s line in July 2020. The plans had already been in the works before the pandemic, but the execution came at a difficult time. “We used a zero-based accounting approach based on the knowledge that there are more women going into universities, more women graduating from universities and more women going into the business world than there are men,” said Browne. “I’ve been shopping with my wife and nothing seems to be appealing to her. If she does find something she likes, most likely they don’t have it in her size, color preference, or style. And so, we launched the women’s line and I anticipate that business to be larger than the men’s business at some point.”
Tom James’ employee-owners did not stop there. They knew they had to continue to adapt throughout the pandemic. “Thankfully, we have the resources to be able to transition to what our clients need, in whatever stage of life they’re in, as well as whatever the environment is,” Browne said.
Seizing upon the demands of the moment, the employee-owners of Tom James launched another new line called Custom Comfort Casual. “Because we’re completely vertically integrated and control every step, we were able to develop another line within months,” shared Browne. “This offering aligns with folks working from home and in front of the computer sitting down most of the day. They want things that are going to be very comfortable, that are going to have stretch to it, but they don’t want to be wearing a sweatsuit outfit.”
The road ahead
The first line of Tom James Company’s mission statement reads: We build people and people build the company. The benefits that come with being an employee-owned company are the key to the future of Tom James, and those benefits begin with their people.
“It’s being a part of something greater than yourself,” said Barbara Fuschillo, sales professional at Tom James. “It’s about the team. It’s about the company. Working with these dedicated professionals, and supporting each other, has made me stay for over 15 years.”
“Human nature—especially as we’ve seen during COVID—is that we want to be in relation with people,” Browne said. “A lot of folks have come to me to say the Amazons of the world are going to take things over. My response is that for successful people, their most precious asset is time. I don’t think there will ever come a time when folks do not desire to meet with someone who knows the business, who can give you really strong recommendations, who you’ve cultivated a strong relationship with, and who can do it in less time than you could do it on your own.”
Spencer Hays was inspired by his grandmother to start Tom James Company and to give his employees the chance to become owners. And now employee ownership is changing the lives of the company’s workers’ children and grandchildren, as well.
Thirty-year Tom James Company veteran Whit Behrens is a perfect example. “The wealth and opportunity Tom James has offered me through the years is unprecedented,” Behrens said. “Tom James has allowed me and my family to live comfortably and build a nest egg for my children.”
Browne also shares this sentiment. “Employee ownership has provided us with a lot of value,” he said. “It has absolutely provided generational wealth, where folks literally have changed their generation and generations to come by being owners in Tom James Company.”