SecProbe.io

CORRESP
1
filename1.htm

McRae Industries, Inc.

Mark R. Busch

704.331.7440

Fax: 704.353.3140

mbusch@kennedycovington.com

September 27, 2005

VIA: EDGAR

Securities and Exchange Commission

Division of Corporation Finance, Mail Stop 3561

450 Fifth Street, NW

Washington, DC 20549-0308

Attention: Jeffrey B. Werbitt, Esq.

    RE:

    McRae Industries, Inc. (the “Company”)

Schedule 13E-3 (File no. 5-34909)

Preliminary Proxy Statement on Schedule 14A (File no. 1-8578)

Ladies and Gentlemen:

     This letter responds to each of the comments in the staff’s comment letter dated September 26,
2005. The responses below are keyed to the number of each of the comments. A blackline copy of
the proxy statement reflecting the changes discussed below has previously been provided to Jeffrey
Werbitt of the Staff.

     The responses to your comments, which have been prepared by the Company with input from its
advisors, are as follows:

Securities and Exchange Commission

September 27, 2005

Page 2

    Comment

    No.

    Response

    1

    Oxford Advisors determined that the companies included in the
comparable company analysis had operations and size most
comparable to the Company’s even though most were
significantly larger than the Company because they were the
smallest publicly traded companies with operations comparable
to the Company’s that it was able to identify. As the
“Opinion of the Financial Advisor” section of the proxy
statement previously noted, Oxford Advisors took into account
the significantly larger median size of the comparable
companies as compared to the Company by discounting the
average multiples of the comparable companies by 15%. The use
of the term “size” in the Comparable Company Analysis
subsection of the “Opinion of the Financial Advisor” section
of the proxy statement refers to total revenues. The first
paragraph of the Comparable Company Analysis subsection of the
“Opinion of the Financial Advisor” section of the proxy
statement has been revised to note the above.

    2

    Oxford Advisors believed that fact that the Company was
proposing to pay the highest price paid for the common stock
over the 12-month period prior to announcement of the
transaction was a better indicator of fairness than the amount
of the premium over the closing price on the day prior to the
announcement of the transaction primarily because, as the
“Opinion of the Financial Advisor” section of the proxy
statement previously noted, the Company’s military boot unit’s
operating profits were down by 75% for the first six months of
fiscal 2005 compared to the first six months of fiscal 2004
and in Oxford Advisor’s view the future profitability of this
core business was uncertain. The Comparable Transactional
Analysis subsection of the “Opinion of the Financial Advisor”
section of the proxy statement has been revised to clarify
this point.

Oxford Advisors’ comparable transactional analysis included
far too many companies for tabular presentation of the premium
calculations for each to be practicable. However, to more
clearly present the results of the comparable transactional
analysis, tabular presentation of the premium ranges
calculated compared to the premiums proposed to be paid in the
transaction has been added to the Comparable Transactional
Analysis subsection of the “Opinion of the Financial Advisor”
section of the proxy statement.

Securities and Exchange Commission

September 27, 2005

Page 3

     Should you have any questions with respect to this letter, please call the undersigned at
(704) 331-7440. Should the undersigned not be available, please contact James R. Wyche of this
firm who can be reached at (704) 331-7558.

    Very truly yours,

    /s/ Mark R. Busch

    Mark R. Busch

    For the Firm

    cc:

    McRae Industries, Inc.

Mr. Jeffrey B. Werbitt