Workers on the production line at Topitop’s clothing factory.

On Monday November 14th, 2011, we woke up with great news: Renowned American financial newspaper “The Wall Street Journal”, released a lengthy article about the success of Topitop in the peruvian textile industry, betting for the Peruvian middle class. This report circulated for two weeks by major Latin American newspapers as El Mercurio of Chile, El Tiempo of Colombia, and El Comercio of Peru.

We are very proud and happy for this important international recognition, that certainly put us in cabinet and in the eyes of the world. We present a brief summary of the article.
Matt Moffett
The Wall Street Journal
LIMA, Peru—Aquilino Flores was a ragged looking 13-year-old when he started his career hawking T-shirts in the barrios of this capital city. Today his company, Topitop, is Peru’s largest apparel maker, with a chain of stores extending nationwide.
Over the past decade, as Peru transformed into one of the world’s fastest growing economies, upwardly mobile consumers began snapping up Topitop polo shirts and cargo pants made of high-quality fabrics and marketed under exotic sounding labels. With stores strategically located in long-ignored barrios and provincial towns, Topitop’s sales have expanded six-fold since 2001, earning it the nickname “The Andean Zara.”
Shopping at a Topitop mall store in Lima recently, David Caceres, who runs a tiny car repair business here, bought a dressy pullover from the company’s “New York” label and a star-emblazoned T-shirt from its edgier “Hawk” line. “I’ll still have money left for movie tickets,” he says.
Topitop has prospered by targeting an emerging middle class that is bringing vast economic and social changes to Latin America, a region that has historically had a handful of rich people, many poor ones, and relatively few in between.
While the U.S. and Europe grapple with stagnating middle-class wages, the story in economically resurgent Latin America is just the opposite.
Millions of Latin Americans—construction workers, cooks, secretaries and micro-entrepreneurs—have punched their ticket into the consumer class over the past decade. Some eight million Brazilians took their first plane ride during the past 12 months, according to Sao Paulo’s Data Popular market research firm.
In downtown Lima, middle-class consumers have turned a chaotic 40-block stretch of shops in the Gamarra district into a retail powerhouse, with an estimated $1.5 billion in annual revenues.
The story of Topitop’s rise in Peru illustrates how those extremes are now eroding.
Aquilino Flores began his career as a ragged 13-year-old T-shirt hawker; today he runs Peru’s largest apparel maker. And they buy clothes, lots of them. Topitop has sold garments to one in three Peruvian households, the company estimates.
Mr. Flores, 57, says his own experience rising from poverty has helped him understand the desires of customers who are moving up the economic ladder themselves. The Floreses—five brothers and a sister—were born to a herdsman on a rocky piece of pasture land two miles high in the impoverished region of Huancavelica.
“We’d walk three miles to school and all we’d have to eat was some toasted corn and a tiny bit of cheese,” says Manuel Flores, 59, Aquilino’s older brother, who alternates with him as president.
After starting their factory in Lima, the Flores brothers persisted despite attacks by Maoist “Shining Path” guerrillas, who blew up electrical pylons and placed incendiary devices in stores.
Entrepreneurs like the Floreses “were the people I said were going to get rich…and many of them are now millionaires,” says Peruvian economist Hernando de Soto, an expert in capitalism among the poor.
With the Maoists now mostly out of the picture and the country enjoying a mining boom, Peru’s poverty rate fell to 31% from 55% over the past decade. The middle of the spectrum—with average household monthly income of around $550—grew to 33.1% of the population this year from 28.7% in 2004, according to Lima’s Apoyo consultancy.
The Floreses’ street savvy helped them identify where the new consumers were located and what kinds of products they wanted. Topitop “broke the paradigm,” says Percy Vigil, head of Lima’s sprawling MegaPlaza mall. “For years the working consumer was saying, ‘Why don’t they give me the same product as other consumers? I’m a citizen too.’” Back in 2002, Topitop was one of the few retailers willing to risk renting space in MegaPlaza, which was being built near a shantytown on the north of town.
Thanks to the expanded middle class, MegaPlaza defied skeptics, drawing almost three million monthly customers and making lots of money for Topitop. Around half of Topitop’s $275 million in sales comes from its chain of more than 30 stores in Peru, plus outlets in Venezuela. The other half comes from exports to the U.S., Europe and Brazil, some of which are sold under labels of retailers like Old Navy, Hugo Boss and Under Armour Inc.
Trend-conscious consumers appreciate the company’s capacity to get new collections from the drawing board to shop racks in just 45 days. Topitop produces relatively small volumes of each style and rotates them relentlessly. The clothes are also affordable. A surf shirt from Topitop’s “Maui” line costs the equivalent of about $10, half or less than a comparable import from Billabong.
“Working people are interested in looking good just as much as rich people are,” Aquilino Flores says.