March 27, 2000 12:00 PM

Living in a mud-floored hut in the Andes mountains, 25-year-old anthropology student Annie Hurlbut could barely afford the flight home to Kansas that Christmas of 1976, let alone a gift for her mother’s upcoming 50th birthday. But in a dusty market in Cuzco, Peru, she stumbled across a chocolate-hued alpaca-wool sweater-coat that had been hand-knit by a local woman. Hurlbut was taken by the formfitting creation, which cost $15. So too was her mother, Biddy, who called it “the prettiest thing I’d ever seen.”

Mighty pretty also describes what Hurlbut and her mother have spun from that serendipitous discovery: a $35 million knitwear company called Peruvian Connection that sells through mail order and four stores around the country, plus one in England. From their improbable headquarters—the family’s century-old Tonganoxie, Kans., barn—the Hurlbuts dispatched 200,000 items last year to clients from Miami to Tokyo. Their luxurious line, handmade in Peru of jewel-toned alpaca wool or silky-soft pima cotton, has won such high-profile fans as Sheryl Crow, Kathleen Turner, Michael Keaton and Frances Shand Kydd, Princess Diana’s mother. “The handwork is superb, and the colors are unbelievable,” says actress Angela Lansbury of the three sweaters she has bought over the past decade.

Fashion’s current craze for chunky knits certainly hasn’t hurt business, though Annie, now 48, insists her wares aren’t about trends: “People hand these sweaters down to their children as heirlooms.” At $128 to $498 a pop, the sweaters—such as a top-selling $425 kilim-weave long vest—”may seem expensive,” she adds, “but it takes a knitter a whole month to make one.”

Back in 1976, Biddy’s friends clamored for copies of her birthday present. So her self-described “hippie expatriate” daughter borrowed $4,000 from an insurance policy and, on her return to Peru, took bumpy bus rides to hilltop villages and found local kniterati to reproduce the garment. Meanwhile, Biddy, a volunteer for feminist causes, rustled up interest from merchants, landing a $900 order from an upscale Kansas City, Mo., department store. After just a year, the business proved so fulfilling that Annie chucked her University of Illinois Ph.D. thesis on Peruvian market women to focus on the venture full-time. “Annie and I had always thought we’d like to have a business together,” explains Biddy, now 73. “We get along so well.”

Perhaps because they play to each other’s strengths. As chairman of the board, Mom directs 92 staffers from a converted barn on the 1,200 acres that she and husband Gordon, 76, a retired farmer and county commissioner, own. (They live in a house on the property.) CEO Annie, for her part, oversees the nine U.S.-based designers who create the three yearly collections. She also produces the catalog from her home in nearby Kansas City, Mo., where she lives with her husband, Rick Zander, a woodworker, and their two daughters.

The Tonganoxie staffers vote on each season’s proposed collection of sweaters—typically hybrids of modern and native patterns. Then hundreds of Andean knitters are free to improvise special stitches or other touches for each design. Peruvian Connection pays the mostly women artisans “more than some lawyers and schoolteachers in Peru,” says Annie, who has opened two day-care centers in Lima for workers’ children.

The growth of the Hurlbut biz has been “mind-boggling,” says Martin Baier, a Virginia-based direct-marketing consultant who credits Annie’s “crackerjack marketing” skills for its success. Indeed, in the early years she once handwrote 5,000 letters to accompany catalogs. “Now I know that is a savvy marketing strategy,” Annie says, “but back then I was just doing it because my mom taught me that was the polite thing to do.”

The warm and fuzzy entrepreneurs, who recently added men’s, children’s and home products to their lineup, are now expanding overseas via the Internet. “I’m not sure I knew at the time what I was looking for,” says Annie. “But in retrospect, I realize I found it in a dusty market stall.”

Shirley Brady

Pam Grout in Tonganoxie

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