What's Happening?
Destination XL Group and FullBeauty Brands, two major players in the inclusive-sizing apparel market, have announced a 'merger of equals' to create a new entity with combined net sales of $1.2 billion for the year ending October 2025. The merger, approved by both companies' boards, is expected to generate $25 million in annual cost synergies by 2027 through cost-of-goods optimization and organizational efficiencies. The new company will focus on a direct-to-consumer model, accounting for 73% of total sales, while maintaining a significant brick-and-mortar presence with 296 stores. Jim Fogarty, the current CEO of FullBeauty, will lead the new company, which aims to leverage data science, digital scale, and proprietary fit technology to drive
innovation in the inclusive fashion market.
Why It's Important?
This merger is significant as it consolidates two major players in the fragmented inclusive-sizing market, potentially setting a new standard for the industry. By combining resources, the new entity aims to enhance its market position and better serve the plus-size and big-and-tall apparel segments. The merger is expected to benefit from cross-brand and cross-channel traffic, leveraging FullBeauty's digital capabilities and DXL's national brand and fit expertise. This strategic move could lead to increased competition in the market, offering consumers more options and potentially driving innovation in product offerings and customer service.
What's Next?
Following the merger, the new company plans to focus on disciplined store openings and expanding its direct-to-consumer reach. The leadership transition will see FullBeauty CEO Jim Fogarty at the helm, with DXL CFO Peter Stratton taking on the CFO role. The merger is structured as an all-stock transaction, with FullBeauty shareholders owning 55% of the new company. The combined entity will likely focus on integrating operations and realizing the projected cost synergies while exploring new growth opportunities in the inclusive-sizing market.
