Destination XL to review dozens of leases for potential store closures
The big-and-tall menswear retailer is assessing leases expiring in 2027 as weaker in-store sales and online shopping pressure its physical footprint.
Destination XL has closed three stores in 2026 and will review a few dozen leases expiring next year for possible further closures, according to a Yahoo Finance report citing the company’s second-quarter earnings call.
Chief financial officer Peter Stratton said the leases would be assessed case by case over the next six months. The company has not disclosed how many locations could ultimately close, and said the review would have limited impact in 2026.
Destination XL is seeking to reduce occupancy and store operating costs as leases expire or kick-out rights become available. Stratton said the strategy is intended to improve sales per square foot and four-wall profit over time by redirecting customers from high-occupancy stores to other locations where possible.
The company’s in-store comparable sales fell 4.3% in the second quarter, while sales from its direct business declined 1.6%. Management said improvements to its app and website helped conversion in the direct channel, which also benefited from clearance merchandise.
The report linked weaker physical-store demand to the broader shift towards online shopping, where customers can access a wider range of sizes. Commentary cited in the report also suggested that GLP-1 weight-loss drugs may be changing apparel demand, although the material does not establish the drugs as a direct cause of Destination XL’s store review.
Cost reductions from the store rationalisation programme are expected from 2027 onwards.
