Destination XL Group, Inc. and its longtime competitor KingSize are merging.
On Thursday, the Canton, Mass.-based men’s big and tall retailer Destination XL said it will merge with FBB Holdings Inc., an inclusive-size retailer for men and women that operates under the FullBeauty and KingSize names.
The combined business will have annual sales of about $1.2 billion.
Under the terms of the merger agreement, FullBeauty will merge with a newly formed subsidiary of DXL, with DXL remaining the publicly traded entity under the ticker symbol DXLG. In addition, at closing, certain of FullBeauty’s equity and debt holders will complete a committed subscription of $92 million, through the sale of common stock in exchange for a combination of new equity and outstanding debt equitization, resulting in a term loan outstanding at closing of about $172 million, with a maturity of August 2029, the companies said.
FullBeauty was founded in 1910 and serves both plus-size women and big and tall men under the FullSize and KingSize names. As a result of the merger, DXL and FullBeauty will combine as a public company with sales of approximately $1.2 billion and adjusted earnings before interest, taxes, depreciation and amortization of about $70 million, based on the performance of both businesses for the last 12 months ending October 2025.
Direct-to-consumer will account for 73 percent of sales and DXL’s brick-and-mortar stores the remainder. FullBeauty has no physical stores.
Following the completion of the all-stock transaction, FullBeauty and DXL shareholders will own 55 percent and 45 percent of the combined company, respectively.
FullBeauty has been on a growth spurt of late. The company, which grew out of the Redcats mail order business that was owned by PPR before the luxury giant changed its name to Kering, already has a host of plus-size brands targeting Boomers and older Gen Xers, including Catherines, WomanWithin and Jessica London. In the past several years it has acquired Dia & Co., which has both a size-inclusive marketplace and a styling service that uses algorithms and human stylists to recommend looks to shoppers. It also purchased the intimates brand Cuup and the trendy Eloquii, which was owned by Walmart.Â
Jim Fogarty, chief executive officer of FullBeauty, will serve as CEO of the combined company and Harvey Kanter, president and CEO of DXL, will exit the business after the deal has closed. Peter Stratton, current chief financial officer of DXL, will serve as CFO of the combined company. Its headquarters will remain in Canton, with a “significant presence in New York City, Indianapolis and El Paso,” the firms said.
The combined company’s board will comprise nine directors — four appointed by FullBeauty, four by DXL and one independent director to be mutually agreed upon by the go-forward directors prior to closing.
“By uniting DXL and FullBeauty we are creating a leader in a fragmented market that will define the next decade of inclusive fashion,” said Fogarty. “Together we will be a powerful engine for innovation — combining data science, digital scale, proprietary fit technology and differentiated store expertise. With our shared values and mission, incredible portfolio of brands, complementary capabilities, enhanced financial profile, proven record of successful brand integrations and the scale of a larger public company, we expect to deliver sustainable growth, stronger margins and long-term shareholder value — while expanding choice for customers in an apparel category that has historically lacked options.”
“We are excited about what this transaction means for our associates, customers and shareholders,” said Kanter. “Together with FullBeauty, we will be better able to serve our customers across the plus-size and big and tall apparel market, providing them more brands, more styles and more options whether they shop in stores or online through our powerful omnichannel platform. Our shareholders will benefit from the upside potential of our large, combined company as we capture growth opportunities, leverage our fit expertise, execute on cost synergies and use our enhanced financial position to invest in our business. We look forward to working with FullBeauty and joining our teams to deliver on the promise of this combination.”
Lionel Conacher, chairman of the current board of DXL, said, “Following a comprehensive review of this transaction, the board determined that this combination has the potential to create significant value for and is the best path forward for DXL shareholders. We look forward to working together to guide the combined company to even greater success as one organization.”
Steve Tesoriere, portfolio manager of funds managed by Oaktree Capital Management, L.P. and director of FullBeauty, added, “As the largest individual owner of FullBeauty, we look forward to participating in the significant upside potential this transaction creates. We expect the combined company will generate solid free cash flow and generate very attractive shareholder returns.”
The businesses will have a direct-to-consumer base of 34 million households and 296 stores. The combined business will be 54 percent women’s and 46 percent men’s, Fogarty said on an afternoon earnings call.
The transaction is expected to generate $25 million in annual run-rate cost synergies by 2027 primarily through cost-of-goods optimization, organizational efficiencies, reduced overhead expenses and other cost-saving measures, the companies said Thursday. The combined company intends to begin capturing these synergies promptly after closing the transaction, with a significant portion to be actioned within the first 12 months.
The merger is expected to close in the first half of fiscal year 2026. Those approving of the deal include Fund 1 Investments LLC, one of DXL’s largest shareholders, which made an offer last December to take the retailer private. The investment firm owns about 19.4 percent of the existing voting share of DXL.
Separately, DXL reported third-quarter earnings on Thursday, posting a net loss of $4.1 million, or 8 cents a share, higher than the $1.8 million, or 3 cents a share, reported in the prior-year period. Total sales were down 5.2 percent to $101.9 million from $107.5 million, and comparable-store sales fell 7.4 percent in the period, a 5.2 percent drop in stores and 13.1 percent online.
Kanter said the results “reflect a big and tall customer who is not shopping as frequently or spending as much money with DXL as we have seen in prior years. There has been a discernible shift in customer preference towards entry-level price points and private brands, which compels us to extend and evolve our core assortment to provide a greater selection of our private and value-driven brands.”
