Dive Brief:
- Harvey Kanter, CEO of Destination XL Group, which runs men’s plus apparel stores as DXL, is retiring. On Tuesday, he is stepping down from his role and from the board.
- On Wednesday, board chair Lionel Conacher will take on the role in the interim, the company said last week.
- DXL is grappling with a number of challenges, including the effects of weight-loss drugs on its business, a pending merger with women’s plus conglomerate FullBeauty Brands and a takeover offer from financial firm Zodiac Partners.
Dive Insight:
About a year ago, DXL extended Kanter’s tenure as CEO. At the time, the plan was for him to leave right about now, so it’s not clear why the company doesn’t have a permanent replacement on deck.
Conacher, who is maintaining his position as board chair, said in a statement that the retailer’s board “will conduct a thorough search to identify the right leader to execute on our strategic priorities and capture the opportunities ahead in a dynamic consumer environment.”
For plus-size apparel, the environment is especially fraught as weight-loss medications disrupt apparel sales. DXL executives have noted the volatility from the rising use of the drugs, though the retailer and its would-be merger partner, FullBeauty, still see opportunity in the space.
That merger, announced late last year, may not be finalized after all. A few weeks ago, DXL’s board said it no longer believes that the tie-up is in the best interest of the retailer or its shareholders, citing FullBeauty’s debt load and other concerns about its equity value.
However, that has not translated into interest in taking Zodiac Partners up on its proposal. The firm bid about $46 million, which DXL rejected in May, and got no further with the board weeks later when it updated its offer.
Last week, Kanter noted Conacher’s experience with mergers and acquisitions.
“Lionel has significant M&A experience that will help us navigate both the FullBeauty merger transaction and Zodiac Partners’ unsolicited tender offer in the near term,” he said.
