Destination XL Pauses Merger With FullBeauty After Weaker Quarterly Results

The board said tougher consumer demand and concerns about FullBeauty’s debt drove a reevaluation that will focus on shareholder value and next steps for the deal.

Overview

On Wednesday DXL’s board announced it has paused and is re-evaluating the planned merger with FullBeauty Brands while continuing constructive discussions with FullBeauty.
DXL reported a widened first-quarter net loss of $5.9 million, sales of $103.3 million, and comparable-store sales down 3.8 percent, with in-store traffic falling faster than online.
Transaction-related fees tied to the proposed merger rose to $1.2 million in the quarter and contributed to weaker results, and the company has filed a claim with U.S. Customs and Border Protection seeking about $4.0 million in tariff refunds.
Management said DXL has roughly $60 million in cash, no debt, and access to additional financing if needed, and the board is pursuing succession planning as CEO Harvey Kanter confirmed his planned retirement on Aug. 11, 2026.
The board cited a deteriorating consumer environment and FullBeauty’s leverage as the primary reasons for the pause, a move that preserves DXL’s liquidity while the company decides whether to proceed or seek alternative paths to create shareholder value.