Plus-size apparel retailers Destination XL Group and FullBeauty Brands have agreed to merge in an all-stock transaction, creating a scaled player in the fragmented inclusive apparel market.
The companies expect the deal to close in the first half of 2026.
The combined company will serve a customer base of approximately 34 million households and operate 296 stores.
FullBeauty CEO Jim Fogarty will lead the business as chief executive, while DXL CFO Peter Stratton will serve as chief financial officer.
Executives said the companies expect to generate $25 million in annual cost savings by 2027. Over the last 12 months through October, the two businesses posted combined net sales of about $1.2 billion.
Total debt at closing will be $172 million, consisting of FullBeauty’s existing debt, which will be assumed by DXL.
The companies described the transaction as a “merger of equals” that will create a “scaled, category-defining retailer for inclusive apparel.”
The combined company will be governed by a nine-member board, with four directors appointed by each company and one independent director selected jointly prior to closing.
The deal comes as the plus-size apparel category continues to face structural challenges, including limited representation in mainstream fashion and inconsistent investment from large apparel brands.
DXL, which focuses on big-and-tall men’s apparel, has struggled recently.
In the third quarter, the company reported a more than 5% year-over-year decline in total sales to $101.9 million, with comparable sales falling more than 7%. Gross margin and merchandise margins contracted, and the company’s net loss widened.
FullBeauty, a privately held women’s size-inclusive apparel group, has expanded aggressively through acquisitions in recent years, purchasing legacy retailers such as Catherines as well as digital-first brands including Dia, Eloquii and intimates label Cuup.
Despite near-term pressures, the companies said the merger positions them to capture greater share in what they describe as a largely untapped market.
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They acknowledged the growing use of GLP-1 weight-loss medications, which some analysts expect could modestly reduce average waist sizes in the U.S., but said the impact on the plus-apparel segment is likely to be limited.
DXL and FullBeauty said their businesses are already adapting, citing a shared emphasis on fit, flexibility and customer support.
The companies pointed to offerings such as DXL’s FiTMAP size-scanning technology, introduced last month, and FullBeauty’s free exchange program as tools to serve customers whose sizes fluctuate, including those using GLP-1 medications.
“By uniting DXL and FullBeauty we are creating a leader in a fragmented market that will define the next decade of inclusive fashion,” Fogarty said.
He added that the companies expect the transaction “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.”
Upon completion of the deal, FullBeauty shareholders will own 55% of the combined company, while DXL shareholders will own the remaining 45%. DXL will remain publicly traded following the merger.
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