Destination XL Group (DXLG) reported that comparable sales for its 9‑week holiday period ending January 3, 2026 fell 5.8% versus the 8.7% decline seen through the first nine months of fiscal 2025. The decline in the direct‑to‑consumer channel narrowed sharply to a 2.8% drop from a 14.6% decline in the same earlier period, a swing driven by a series of targeted promotions that lifted online traffic and conversion rates.
The company’s management highlighted that the improvement in the direct business offset a larger decline in store sales, which continued to suffer from reduced foot traffic and broader discretionary‑spending weakness. Cost‑control initiatives and a focus on high‑margin product mix helped keep gross‑margin pressure moderate, even as overall sales slipped.
DXLG also confirmed that its merger with FullBeauty Holdings I, Inc. is complete. The transaction, announced on December 11, 2025, creates a combined retailer with approximately $1.2 billion in last‑12‑month net sales and an adjusted EBITDA of $45 million before synergies, rising to $70 million once projected synergies are realized. The deal expands DXLG’s footprint into the plus‑size women’s market and gives FullBeauty a national store presence, positioning the combined entity as a category‑defining inclusive‑apparel retailer.
Management noted that the merger will deliver $25 million in annual run‑rate cost synergies by 2027, driven by shared supply‑chain operations, consolidated marketing, and cross‑channel efficiencies. The combined company will also benefit from a stronger direct‑to‑consumer mix, with an expected DTC share of roughly 73% versus 27% in physical stores, a shift that should improve operating leverage and margin stability.
Harvey Kanter, President and CEO of DXLG, said, “The holiday period showed a meaningful improvement in our direct business, and the completion of the FullBeauty merger positions us to serve a broader customer base with more brands and styles across both physical and digital channels.” Jim Fogarty, CEO of FullBeauty and incoming CEO of the combined company, added, “By uniting DXL and FullBeauty we are creating a leader in a fragmented market that will define the next decade of inclusive fashion.”
Analysts have highlighted the merger’s potential to create a category‑defining retailer, citing the combined scale, expanded product assortment, and cross‑channel synergies as key drivers of future growth.
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