Retailers Destination XL Group and FullBeauty Brands agreed to merge, creating a bigger player in the size-inclusive apparel market, the companies announced on Thursday.

The combined company generates approximately $1.2 billion of annual net sales, and expects cost synergies of $25 million by 2027.

FullBeauty shareholders are set to own 55% of the combined company while Destination XL (DXL) shareholders will own 45%.

The plus-size clothing market broadly has grown amid a drive for more body positivity and even users of GLP-1 weight loss drugs like Ozempic are ready to spend on apparel as they drop clothing sizes, industry analysts have said. However, the risk to DXL and FullBeauty is that customers will lose enough weight that they have to shop elsewhere.

DXL operates over 250 stores a

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