Destination XL Board Advises Against FullBeauty Brands Merger
Destination XL Group's (DXL) board of directors no longer believes its planned merger with FullBeauty Brands is in the best interests of DXL and its stockholders, reports Yahoo Finance. The company on Monday issued a preliminary proxy statement recommending that stockholders vote against an issuance proposal, which is needed to consummate the merger.
DXL cited "FullBeauty's level of indebtedness, concerns regarding FullBeauty's potential negative equity value, and the substantial economic dilution that DXL stockholders would experience" as reasoning behind its decision to advise against the merger. A date for the special meeting — which will also include voting on a reverse stock split among other proposals — has not yet been determined.
Total Retail's Take: Destination XL's board of directors is reversing its position on a merger it previously approved with FullBeauty Brands. The men's clothing chain had agreed to a deal in December that would fold FullBeauty into a newly created subsidiary of DXL. At the time, the combined entity was projected to generate about $1.2 billion in annual revenue. Shareholders of FullBeauty would own 55 percent of the enlarged group, with existing Destination XL investors holding the remaining 45 percent.
The merger began to unravel in June when DXL announced it was reconsidering the deal, citing “the increasingly challenging consumer environment since the execution of the merger agreement in December 2025 and FullBeauty’s indebtedness” in a company press release. DXL has also now twice rejected unsolicited go-private offers from Zodiac Partners and reported a 2.1 percent sales decrease in the first quarter of 2026.
Now that the DXL board has advised against the deal, FullBeauty Brands has the right to terminate the merger agreement. DXL could then be required to pay a termination fee of $2.5 million, as well as out-of-pocket fees and expense reimbursement of up to $950,000, per an updated proxy statement from the company. Considering these expenditures, the DXL board must have serious doubts on FullBeauty's ability to return value to the Destination XL brand.
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Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
