Fashion’s hottest news/ A two-for-one offer like no other / The ABFRL demerger: Two paths, one vision

In a strategic move, India’s largest fashion player Aditya Birla Fashion and Retail Ltd. (ABFRL) has demerged into two entities that are planning stronger growth trajectories in their carved-out markets.

FY2025 was a landmark year for Aditya Birla Fashion and Retail Ltd., a fashion behemoth that had grown into not just a house but a mansion of great fashion brands -- which together had pooled in nearly Rs. 14,000 crore the previous year, all from retailing peak fashion in over 900 cities and towns of India. 

Having built this unprecedented size and scale in the fashion space, Aditya Birla Group took a strategic decision to demerge ABFRL’s erstwhile Madura business into Aditya Birla Lifestyle Brands Limited (ABLBL) . The move enables both entities to better leverage its strengths and capabilities for an exciting new future.

ABLBL’s portfolio of brands

The new entity Aditya Birla Lifestyle Brands Ltd. now holds some of India’s best-known brands in its kitty.

• Lifestyle brands – Louis Philippe, Van Heusen, Peter England, Allen Solly, Simon Carter
• Sportswear – Reebok
• Van Heusen innerwear
• Youth western wear – American Eagle 

ABFRL’s portfolio of brands

The post-demerger entity ABFRL has a powerful vision for meeting India’s need for smart and trendy apparel. It covers a wide selection of options, ranging all the way from mass appeal and digital-first brands to luxury offerings and designer couture. 

• Masstige & Value Retail
  •    Masstige fashion – Pantaloons
  •    Value fashion – StyleUp
• Ethnic Brands
  •    Designer led brands – Sabyasachi, Shantnu and Nikhil, House of Masaba, Tarun Tahiliani
  •    Premium wear brands – TASVA, TCNS Brands, Jaypore
• Luxury Retail
  •    Luxury – Galeries Lafayette, Christian Louboutin
  •    Super premium – The Collective & Mono Brands
• Digital First Brands
  •    Large size brands – Bewakoof, The Indian Garage Co, Wrogn
  •    Mid-size brands – Urbano, Veirdo, Nobero, Juneberry

A legacy in Lifestyle 

Before the demerger, ABFRL occupied a unique position as India’s only apparel player to have a comprehensive portfolio across all consumer and price segments, from denims to designer wear to D2C digital-first brands. 

This growth journey dates back to 1988 when Madura Garments was established and went on to make waves in the India market with the launch of iconic brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England. 

The Madura business was acquired by Aditya Birla Group in 1999, marking the conglomerate’s entry into the fashion and lifestyle space. Pantaloons came into the fold in 2012, and the consolidated business was renamed as Aditya Birla Fashion and Retail Limited in 2015. The business continued to grow with the launch of home-grown brands as well as the acquisition of well-known brands, soon establishing itself as India’s largest player in the dynamic fashion and lifestyle space. 
 

Future of fashion

With the demerger in FY25, Aditya Birla Group has taken big strides towards participating more intensely in India’s lifestyle and fashion consumption story. ABLBL and ABFRL will operate as two independent growth engines with distinct capital structures, clear capital allocation and parallel value creation trajectories. 

ABLBL carries with it legacy brands with 30+ years of maintaining a strong consumer connect and financial track record, such as: 

• Robust revenue growth
• Profitability
• Free cashflows
• High ROCE

Clearly, ABLBL’s strong balance sheet will continue to power its growth aspirations for the Indian market. 

The demerged ABFRL entity too offers an exciting vision for India’s fashion consumers, with a portfolio that comprises key brands in high-growth segments and a large total addressable market (TAM). Moreover, it stands poised to be backed by sectoral tailwinds, such as a consumer shift from unbranded to branded apparel, a trend towards premiumisation, and a growing Gen Z audience that is comfortable with e-commerce and digital-first brands. With an eye to this market shift, ABFRL plans to boost its growth capital through fund raising.
 

The benefits of demerging

The Group has articulated the many positives that will arise from the demerger. 

• Operating architecture for both companies will allow sharper focus on their individual business strategies.
• Existing shareholders can unlock value for the overall business portfolio through price discovery of the individual entities.
• Separately listed companies can attract specific investors basis their business profile.
• The two entities will be able to address stronger capital market outcomes.

In short, ABLBL will be able to unlock cash flow to fuel accelerated growth. Its high ROCE profile enables a clear path for independent value creation, offering a strong growth and profitability outlook.

The demerged ABFRL will focus on larger market segments (TAM) with high growth, leveraging its strengths in distribution. Its strengths include a large, comprehensive portfolio with leadership play, namely:

• Largest ethnic wear portfolio
• Strong masstige and value retail business
• Largest play western wear portfolio
• Leading luxury retail play
• Largest portfolio of digital fashion and lifestyle brands 

Exciting horizon 

Aditya Birla Group’s plans for the next five years for its two fashion businesses are hugely exciting and inspiring. The demerger marks a beginning of two focused journeys aligned with the evolving fashion landscape of India. With complementary strengths, distinct portfolios, and independent growth agendas, both entities are now better equipped to scale new heights. ABLBL’s vision is to double in scale and triple in cash profits. The demerged ABFRL entity plans to grow three-fold in scale. India’s fashion landscape has never been so exciting.