In a 3-quart pan over medium heat, cook bacon until crisp. Discard all but 2 tablespoons of the drippings. Add onion and celery and cook until limp, stirring occasionally.
Add butter, potato soup, milk, and minced clams and their liquid. Thicken with flour/milk mixture.
Add potatoes. Heat until potatoes are cooked. Stir in sherry and thyme.