Aditya Birla Fashion Invests Heavily in TMRW, Prioritizing Expansion Over Profitability

Aditya Birla Fashion and Retail Ltd Expands Digital-First Lifestyle Brands

Bengaluru: Aditya Birla Fashion and Retail Ltd (ABFRL) is investing heavily in TMRW, its fast-growing portfolio of digital-first lifestyle brands. The company is prioritizing scale over near-term profitability, viewing the next two years as "foundation-setting years" for the business.

TMRW's revenue saw a 29% year-on-year increase to ₹242 crore in the December quarter, despite continuing to operate at a loss. Ebitda (earnings before interest, taxes, depreciation, and amortization) losses narrowed marginally to ₹57 crore from ₹62 crore a year earlier.

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For the nine months through December, TMRW's revenue rose 31% from a year prior to ₹662 crore, although Ebitda losses widened to ₹182 crore. ABFRL noted in its investor presentation that TMRW's losses have "now peaked", with margins improving nearly 900 basis points year-on-year.

The company is aggressively expanding its omnichannel presence through exclusive brand outlets, direct-to-consumer platforms, and newer distribution experiments such as quick commerce. Four TMRW brands – Bewakoof, Wrogn, The Indian Garage Co, and Nobero – have already entered offline retail, with the company ending FY26 with about 125 stores across brands.

ABFRL's push for TMRW is significant as the broader house-of-brands model faces increasing scrutiny globally and in India. "The model itself has been a zero-sum game," said Ankur Bisen, senior partner at retail consultancy The Knowledge Company. "There is no definite example so far to show the model has worked."

TMRW argues that its strategy differs fundamentally from earlier brand aggregators because it is focused entirely on fashion and lifestyle and is building long-term operating capabilities rather than simply rolling up brands. The company currently has three brands in the ₹300-crore range and another three in the ₹75-200 crore bracket.

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TMRW believes it can solve the problem of young, digital-first brands struggling to scale by centralizing investments in technology, artificial intelligence (AI), supply chain, product development, and omnichannel distribution. The company raised ₹437 crore from ServiceNow Ventures in August 2025 to scale its technology capabilities.

The company is increasingly prioritizing direct-to-consumer channels and exclusive brand outlets over marketplace-led growth. About 70% of Bewakoof's business now comes through its app, while several other brands are rapidly scaling their app-led businesses.

Community-led engagement has also become central to TMRW's strategy. Bewakoof leans heavily into fandom and pop culture, Nobero focuses on travel and athleisure communities, while Wrogn is positioning itself around sports, fitness, and youth identity.

Industry experts remain unconvinced about whether the house-of-brands model can sustainably work at scale in India. The Knowledge Company's Bisen argued that most successful house-of-brands businesses have historically emerged from digital-first ecosystems with strong online consumer acquisition engines, giving them a structural advantage over legacy offline retailers entering the space later.

"If you are an offline-first player, then you are starting with a handicap," he said. He also questioned whether ABFRL has clearly demonstrated a differentiated "right to win" in the category, especially as competition intensifies from platforms such as Myntra, Nykaa Fashion, and Reliance Retail.

The larger challenge, according to Bisen, is consumer stickiness. "The most important metric will be repeatability," he said. "Are consumers coming back?"