Destination XL Group (DXL) and FullBeauty Brands Inc have agreed to merge their plus-size clothing businesses to create a combined retailer for inclusive apparel.
Canton, Massachusetts-based DXL sells apparel for ‘big + tall’ men at retail and outlet stores throughout the US, as well as its e-commerce site. FullBeauty Brands, founded in 1901, offers inclusive fashions for both plus-size men and women.
The two companies say the deal will unite complementary brands and channels to create a larger, stronger and more flexible public company that better serves its targeted customers, with approximately $1.2 billion of combined annual sales.
Offerings will span value to premium, inclusive sizing apparel across lifestyles and occasions.
Jim Fogarty, current CEO of FullBeauty, will become CEO of the new entity, and Peter Stratton, current CFO of DXL, will be its CFO. The company will remain headquartered in Canton, MA and is expected to maintain a significant presence in New York, Indianapolis and El Paso.
“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.”
Under the terms of the agreement, FullBeauty will merge with a newly formed subsidiary of DXL, while DXL will remain a publicly traded entity. FullBeauty and DXL shareholders will own 55 per cent and 45 per cent of the combined company, respectively.
The transaction is expected to generate $25 million in annual run-rate cost synergies by 2027, primarily through organizational efficiencies and optimization and reduced overhead expenses.
Kara Whitely, CEO of The Gorgeous Agency, told Inside Retail that the deal runs counter to the current narrative that the plus-size segment is shrinking because of GLP-1 weight loss medications.
According to the expert, data has shown that the plus-size market continues to grow year over year, and that the majority of the US population still falls into plus-size or big + tall categories even with GLP-1 adoption.
“This combination of FullBeauty and DXL is strategically aligned with what the actual consumer data shows: the need for inclusive, high-quality options is bigger than ever, and companies that double down on this audience are the ones positioned for growth,” Whitely added.
Last April, FullBeauty Brands purchased online fashion marketplace Dia & Co, as part of its strategy to increase its presence.
