1. DXL and FullBeauty announced a merger to create an inclusive apparel leader. 2. The merger targets a fragmented market with significant growth opportunities. 3. Expected $25 million in annual cost synergies to enhance financial performance. 4. Both companies anticipate improved customer experience via a robust omni-channel strategy. 5. The combined entity will control 73% direct-to-consumer sales with a wider product range.
FAQ
Why Bullish?
The merger enhances DXL's market position and profitability potential, similar to past successful mergers in retail. For instance, companies like Target and Walmart gained competitive advantages post-merger by improving operational efficiencies and market reach.
How important is it?
The merger's potential for cost synergies and market capture is pivotal for DXL's growth strategy, making it highly relevant for investors.
Why Long Term?
While immediate benefits from synergies may surface within a year, structural changes and market leadership will solidify over years, reflecting a long-term positive trajectory.
Destination XL Group (DXLG) and FullBeauty Brands Announce Merger of Equals
CANTON, Mass. and NEW YORK, December 11, 2025 (GLOBE NEWSWIRE) – Destination XL Group, Inc. (NASDAQ: DXLG), a leading integrated retailer of Big + Tall men’s apparel, has announced a definitive agreement to merge with FBB Holdings I, Inc. (FullBeauty), a pioneer in inclusive sizing for both genders. This merger of equals is set to create one of the largest omni-channel retailers in the inclusive apparel market, with anticipated annual combined net sales of approximately $1.2 billion.
Strategic Growth Opportunities in an Underserved Market
The newly formed entity aims to capture accelerated growth opportunities in a fragmented market that has historically underserved customers looking for inclusive sizing options. By combining their resources, DXLG and FullBeauty expect to generate run-rate cost synergies of $25 million within the first year post-merger, enhancing their operational efficiency and freeing up cash flow for further investments.
Following the completion of the all-stock transaction, FullBeauty shareholders will retain 55% ownership of the combined company, while Destination XL shareholders will hold 45%.
Enhancing Customer Experience through Innovation
This merger positions the combined entity to better serve the diverse needs of plus-size women and Big + Tall men. By leveraging their strengths across product offerings, channels, and unique customer experiences, the new organization is poised to deliver enhanced services via an innovative, multi-channel approach. Notably, the business model reflects a significant focus on direct-to-consumer sales, which will make up approximately 73% of total sales, with brick-and-mortar contributing 27%.
Financial Metrics and Future Outlook
For the twelve months ending October 2025, the merger partners report combined net sales of approximately $1.2 billion, with adjustments leading to an estimated Adjusted EBITDA of about $45 million. Once synergies are accounted for, this figure could increase to $70 million.
“We are excited about what this transaction means for our associates, customers, and shareholders,” said Harvey Kanter, President and CEO of DXLG. He emphasized that the merger will enhance their ability to serve customers and capitalize on growth opportunities associated with their newly combined knowledge and infrastructure.
Leadership Insights on the Merger
Jim Fogarty, CEO of FullBeauty and the incoming CEO of the combined company, expressed optimism about the merger's potential to reshape inclusive fashion. He noted, “Together, we will be a powerful engine for innovation...expect to deliver sustainable growth, stronger margins, and long-term shareholder value.”
Lionel Conacher, Chairman of DXLG's current Board, remarked on the potential value this merger brings to DXL shareholders and the strategic alignment between both companies. “This combination has the potential to create significant value for... our shareholders,” he added.
Synergies and Efficiency Goals
The merger is projected to yield significant synergy opportunities, primarily through cost-of-goods optimization, organizational efficiencies, and reduced overhead expenses, aiming for $25 million in annual run-rate cost synergies by 2027. The newly formed company intends to begin integrating these efficiencies immediately after the transaction closes.
Looking Forward
As DXLG and FullBeauty prepare for this significant merger, both companies convey a clear vision of how their combined efforts will transform the inclusive apparel landscape. This strategic alliance is set to establish a new standard in size-inclusive fashion, ultimately benefiting both customers and shareholders alike.