Destination XL Group Inc

National specialty clothing chain Scrubs & Beyond is closing all of its retail stores and moving to a digital-only model. The workplace clothing maker, which primarily sells scrubs for hospitals and other medical facilities, operates more than 115 stores across 30 states, and many locations have already begun going-out-of-business sales, though no timetable for the shutdowns has been shared. The company has not given a reason for the closure, and a message on its website simply reads, "All Retail Stores Closing — Shop the Sale." The shift comes as e-commerce sales accounted for 17.1 percent of total U.S. retail sales in the second quarter of 2026, according to United States Census Bureau data, and as a Morgan Stanley Research AlphaWise survey found 77 percent of U.S. consumers cite convenience as a key purchasing factor. Other clothing retailers including Torrid and Destination XL have opted to trim store counts, but Scrubs & Beyond has chosen to shut its entire chain.

Destination XL Group reported second-quarter net sales fell 3.4% to $111.6 million and comparable sales dropped 3.5%, while adjusted EBITDA jumped to $7.7 million from $4.7 million a year earlier. Interim CEO Lionel Conacher framed the quarter as proof a turnaround is taking hold, and CFO Peter Stratton called the quarterly comp the strongest in 3 years, with comparable sales improving from down 5.7% in May to down 1.9% in July. Adjusted EPS reached $0.05, up from $0.01, and GAAP net income hit $2.0 million, helped by a $4.6 million tariff refund; gross margin rose 270 basis points to 47.9%, but nearly all of that gain traces back to the refund, and without it merchandise margin would have been roughly 70 basis points worse than last year. The company also walked away from its planned merger with FullBeauty, a deal the board concluded would have diluted existing stockholders given FullBeauty's weakening finances, though the deal still needs SEC clearance and a stockholder vote before it is formally dead. Stratton called store traffic the company's single biggest hurdle, with physical store comps down 4.3% and direct sales down 1.6%, and Chief Growth Officer Jimmy Olsson said customers on GLP-1 weight-loss medications tend to stop buying apparel altogether for a period before their sizing stabilizes.

Destination XL Group has appointed Chairman Lionel Conacher as Interim Chief Executive Officer, effective August 12, 2026, following the previously announced retirement of Harvey Kanter on August 11. Conacher will continue as Chairman while stepping down as Audit Committee Chair and from the Compensation Committee, with Carmen Bauza named Lead Independent Director. The company is navigating a merger with FullBeauty Brands and an unsolicited tender offer from Zodiac Partners, and Conacher's significant M&A experience was cited as valuable for these transactions. DXL is executing a strategy to return to profitability through cost reductions and evolving its assortment, promotional strategy, and customer experience, while advancing key priorities including its FiTMAP rollout, AI investments, and responding to increasing GLP-1 usage.