All in the Family
> After six decades of operation, McRae Industries has thrived as a family business – and is now in its third generation.
Leaving a lasting footprint
FAMILY BUSINESSES ARE UNIQUE– yet often challenging – form of operation. Less than 30 percent of family businesses survive into the third generation of family ownership. McRae Industries, a leading manufacturer of combat boots and western footwear, defies the odds. For six decades, the company has more than survived as a family business. It continues to thrive.
Abiding by family values
McRae Industries founder and CEO Branson McRae, along with his wife, Lorraine, encouraged their four children to get a college education. Daughters Gail and Sandra became teachers. Gary and Jim both received business degrees, Gary a masters and Jim a BSBA. “Even though higher education was expected, our parents didn’t pressure us to be groomed to run the family business,” Gary says. “They knew the opportunity to join the McRae team was there – and any of us would be welcomed if we chose that career path.”
At Appalachian State University, Jim studied hospital management. After graduation, he and his wife Kathy lived in the mountains of Newland, NC, where Jim worked at the local newspaper selling advertisements, doing some photography, and laying out ads. In 1977, Branson and Lorraine suggested they move to Mount Gilead, and Jim was offered a job in quality control at the McRae shoe factory.
Gary studied textile technology at North Carolina State University. After graduation in 1972, he was employed by the American Viscose Division of FMC Corporation in Marcus Hook, PA, as a technical representative. In this position, he helped customers understand how to process new rayon and polyester fibers and filaments in their factories. In December 1974, Gary’s father asked him to join the family business. He did so in February 1975 and married wife Kat in 1978. In 1984, Gary received an MBA from Wake Forest University.
"Over the years, we've had few family business conflicts. We've always communicated well and talked things through."
Finding the best niche
Gary came back to the company before Jim. “As the oldest son, I worked more closely with Dad on various projects, so becoming the CEO and president after he passed away was a natural evolution,” Gary says. “I’m close with Jim, who is the secretary, director, and vice president, and I value his opinion. We speak openly about most everything.”
The McRae females played a role in the early days of the business. Gail and Sandra did production work during high school summer breaks, and Lorraine served as secretary, purchasing agent, and payroll clerk.
Passing the torch to the new generation
Jim’s son, Jay, is the plant maintenance supervisor for McRae Footwear. Gary’s son, Branson, has a business and law degree and serves as the operations manager and compliance manager for Dan Post Boot Company. He also serves on the McRae Industries board of directors. Gary’s daughter, Stephanie, has a degree in history and a postgraduate degree in art history. She is the product development manager for Dan Post Boot Company. “Just as Jim and I weren’t pressured to join the family business, we did not coax our kids into it, ” Gary says. “They enthusiastically chose to join us.”
Secrets of success
McRae has a set of by-laws that addresses governance issues such as composition of the company board. Although the family owns a majority of the outstanding stock, McRae Industries, Inc. is a public company that trades on the over-the-counter market.
“We think we have a good relationship with our shareholders,” Gary says. “By virtue of not reporting to the Securities and Exchange Commission, McRae Industries is not required to publish an annual report with audited financials but we choose to do so to keep our shareholders aware of the company’s performance. We have an annual shareholders meeting so that any shareholder can attend if they wish to do so.”
“Key to our long-term success has been staying focused on our company values and our company’s core businesses. We are conservative with the company’s assets, hire knowledgeable team members who fit our culture, and seek professional advice in areas where our knowledge is lacking. In keeping with Dad’s values, we are devoted to giving back to the community, to being fair to our employees, and to treating everyone with dignity and respect.”