Destination XL Group Annual Report 2022

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FY2022 Annual Report · Destination XL Group

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Empowering the Big + Tall man
to look good + feel good

A N N U A L R E P O R T 2022

Dear Shareholders,

As history looks back on 2021, in the macroeconomic sense,

While 2021’s results in new customer acquisition and

it may be viewed as a year of uncertainty and uneasiness,

retention may be admirable, we believe we have far greater

but through the DXL lens it will be remembered as the year

opportunities to be the category leader and a leading retail

the Company recovered and found a path to grow bigger and

brand. We know that DXL solves many of the challenges

taller as a retailer and as a brand. The Company’s focus

faced by the big and tall community when it comes to apparel,

on consistent execution against an aligned strategy led to

and we are committed to driving awareness and trial of

creating not just stability, but growth and momentum in a

“The DXL Difference” – our unique fit, assortment, and

dynamic and fluid business environment and retail landscape.

experience – to prospective customers on their terms, and

Like many retailers, DXL was forced to weather pandemic-

driven headwinds in 2020, thus entering 2021 in a softer

financial position than we would have liked. We finished the

year in a very different place – with record revenues, cash

flow, profitability, and customer counts. While these metrics

and the shareholder returns they delivered are commendable,

they are all built upon the dedication and drive of DXL’s

employees – whether in our stores, the distribution center,

or the office. Trying times are often what defines teams

and cultures, and we couldn’t be more appreciative to work

alongside each other as partners with a shared commitment

in the channels in which they choose to shop. Furthermore,

we are investing in new platforms and technologies in

2022 – including an all-new loyalty program and customer

data platform – to unlock profoundly deeper levels of

engagement and personalization across all DXL channels,

as well as establishing renewed commitments within the

environmental, social, and governance arenas. These

investments and initiatives are indicative of DXL’s commitment

to driving customer acquisition and repeat purchases, while

simultaneously enhancing the overall customer experience

that is at the heart of all that we do.

to our customers and the Company’s mission and vision,

As we again acknowledge the work and employee efforts

which formed the very foundation of our 2021 successes.

that drove 2021 results, we want to further emphasize the

The onset of the pandemic placed DXL in a precarious

position – when the world went into quarantine, we were

forced to further assess our repositioning and, in so doing,

decided to restructure more extensively than we initially had

intended. With the retail environment essentially on pause

for several months, we utilized that time to further recraft the

business – from selling, general and administrative expenses

immense opportunities that lie ahead. Over the past two

years, DXL has defined a clear path and remains committed

to the combination of discipline and initiative that has yielded

recent results. Meaningful market share and growth prospects

exist both within DXL’s current core markets and additional big

and tall consumer segments – for which we have planned and

are prepared to aggressively pursue in 2022 and beyond.

to our brand positioning, merchandise assortments, and

Thank you for your time, interest, and support of DXL – it is

promotional strategies. This pause forced DXL to become a

truly appreciated.

demonstrably different company and, as a result, we emerged

from 2021 with enhanced profitability and liquidity, as well as

Sincerely,

measurable top-line sales growth.

Harvey S. Kanter
President and CEO
Destination XL Group, Inc.

Lionel F. Conacher
Chairman of the Board
Destination XL Group, Inc.

DXL’s success, however, does not lie solely in the rearview

mirror, as we believe there are significantly greater

opportunities on the road ahead. The Company is now even

better positioned to capitalize on the market leadership

opportunity as a retailer and brand. The addressable big and

tall market is growing, and the opportunity to leverage DXL’s

core competency of solving for fit within multiple market

segments – including ones that the Company is just beginning

to tap into through targeted product lines and distribution

channel expansions – is as great as it has ever been. Our

singular focus on the big and tall customer – and how to

engage with him on his terms – informs every decision made

at DXL. We know that the customer deserves products that

fit, from an expertly curated and often exclusive assortment,

and an overall experience that is rooted in trust that

empowers him to look and feel his best. In other words,

we don’t want our customers to just buy clothes – we

want them to build confidence.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 29, 2022 (Fiscal 2021)
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM

Commission File Number 01-34219

DESTINATION XL GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

555 Turnpike Street, Canton, MA
(Address of principal executive offices)

04-2623104
(IRS Employer
Identification No.)

02021
(Zip Code)

(781) 828-9300
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

DXLG
Securities registered pursuant to Section 12(g) of the Act:
None.

The Nasdaq Stock Market LLC

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," "smaller reporting company"
and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

☐
☐

Accelerated filer
Smaller reporting company
Emerging growth company

☒
☐
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of July 30, 2021, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $199.9 million,
based on the last reported sale price on that date. Shares of Common Stock held by each executive officer and director and by certain persons who
own 10% or more of the outstanding Common Stock have been excluded on the basis that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily determinative for other purposes.
The registrant had 64,301,152 shares of Common Stock, $0.01 par value, outstanding as of March 15, 2022.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 2022 Annual Meeting of Stockholders are incorporated by reference into Part III.

DESTINATION XL GROUP, INC.

Index to Annual Report on Form 10-K
Year Ended January 29, 2022

PART I

Item 1.

Business ........................................................................................................................................................................

Item 1A.

Risk Factors ..................................................................................................................................................................

Item 1B. Unresolved Staff Comments.........................................................................................................................................

Item 2.

Properties ......................................................................................................................................................................

Item 3.

Legal Proceedings.........................................................................................................................................................

Item 4.

Mine Safety Disclosures ...............................................................................................................................................

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ..

Item 6.

Reserved........................................................................................................................................................................

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.......................................

Item 7A. Quantitative and Qualitative Disclosures About Market Risk......................................................................................

Item 8.

Financial Statements and Supplementary Data ............................................................................................................

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ......................................

Item 9A.

Controls and Procedures ...............................................................................................................................................

Item 9B. Other Information .........................................................................................................................................................

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections..........................................................................

PART III

Item 10.

Directors, Executive Officers and Corporate Governance ...........................................................................................

Item 11.

Executive Compensation ..............................................................................................................................................

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ....................

Item 13.

Certain Relationships and Related Transactions, and Director Independence .............................................................

Item 14.

Principal Accounting Fees and Services.......................................................................................................................

Item 15.

Exhibits and Financial Statement Schedules ................................................................................................................

Item 16.

Form 10-K Summary ....................................................................................................................................................

Signatures......................................................................................................................................................................

PART IV

Page

PART I.

Certain statements contained in this Annual Report on Form 10-K (this “Annual Report”) constitute “forward-looking statements,”
including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases,
forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “estimate,” “intend,”
“plan,” “continue,” “believe,” “expect” or “anticipate” or the negatives thereof, variations thereon or similar terminology. The
forward-looking statements contained in this Annual Report are generally located under the headings “Business” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” but may be found in other locations as well, and include
statements regarding the continuing impact of the coronavirus pandemic and its variants on the Company’s business in fiscal 2022,
particularly related to the continued impact from disruptions in the supply chain and inflationary pressures, the ability to manage its
gross margin rate and inventory, and the geopolitical instability from Russia's invasion of Ukraine. These forward-looking statements
generally relate to plans and objectives for future operations and are based upon management’s reasonable estimates of future results
or trends. The forward-looking statements in this Annual Report should not be regarded as a representation by us or any other person
that the objectives or plans of the Company will be achieved. Numerous factors could cause our actual results to differ materially from
such forward-looking statements, including, without limitation, risks relating to the execution of our corporate strategy and ability to
grow our market share, and those risks and uncertainties set forth below under Item 1A, Risk Factors. Readers are encouraged to
review these risks and uncertainties carefully.

These forward-looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or
undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in its expectations or any
change in events, conditions, or circumstances in which the forward-looking statement is based.

COVID-19 Impact on our Business in Fiscal 2021

The COVID-19 pandemic and its variants continued to impact our business and results of operations in fiscal 2021. While we saw
significant improvement in our business from fiscal 2020, substantial uncertainty remains regarding the duration of the pandemic, the
potential impact of new variants, continued disruptions in the supply chain, labor shortages and the long-term effect of the pandemic
on the global economy, and overall consumer demand and spending. The Company has included discussion under Item 1A, Risk
Factors, and under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, with regards to
the impact of the COVID-19 pandemic on its financial results in fiscal 2021 and the continued risks that COVID-19 may have on our
financial results for fiscal 2022.

Item 1. Business

Destination XL Group, Inc., together with its subsidiaries (the “Company”), is the leading specialty retailer of big & tall men’s apparel
with retail locations throughout the United States. We operate under the trade names of Destination XL®, DXL®, DXL Men’s Apparel,
DXL outlets, Casual Male XL® and Casual Male XL outlets. At January 29, 2022, we operated 220 DXL retail stores, 16 DXL outlet
stores, 35 Casual Male XL retail stores, 19 Casual Male XL outlet stores, and a digital business, including an e-commerce site at
www.dxl.com, a mobile site m.destinationXL.com and mobile app. Unless the context indicates otherwise, all references to “we,”
“our,” “ours,” “us” and “the Company” refer to Destination XL Group, Inc. and our consolidated subsidiaries. We refer to our fiscal
years ended January 29, 2022, January 30, 2021 and February 1, 2020 as “fiscal 2021,” “fiscal 2020” and “fiscal 2019,” respectively.

OUR INDUSTRY

We define the big & tall men’s clothing market as starting at a waist size of 38” and greater, as well as tops sized 1XL and greater.
Growth in this segment historically has been driven by rapidly changing market demographics. We believe that we can increase our
market share by catering to the broader target market, attracting customers from various income, age and lifestyle segments and
offering the widest selection of sizes and styles that fit well.

We believe the total core addressable market for big & tall men’s clothing and shoes is approximately $10 billion. We determined this
core market, defined as sizes XXL+ and waist sizes 42”+, with assistance from The NPD Group.

HISTORY

Our Company was incorporated in the State of Delaware in 1976 under the name "Kara Enterprises, Inc." and subsequently did
business under the name "Designs, Inc." Until fiscal 1995, we operated exclusively in Levi Strauss & Co. branded apparel mall and
outlet stores. In May 2002, we acquired the Casual Male business from Casual Male Corp. at a bankruptcy court-ordered auction. At
the time of the acquisition, Casual Male was the largest specialty retailer of men’s clothing in the big & tall market in the United
States. As a result of the acquisition, on August 8, 2002, we changed our name to “Casual Male Retail Group, Inc.” In fiscal 2004, we

acquired the Rochester Clothing stores. Through fiscal 2010, we catered to customers through our three store formats, from our value-
oriented customer (Casual Male XL outlets) to our luxury-oriented customer (Rochester Clothing stores).

In fiscal 2010, we launched a new store concept, Destination XL (“DXL”). The DXL store concept offers our customers an extensive
assortment of products, ranging from value-oriented to luxury-oriented with an increased presence of name brands, without having to
shop multiple stores. In addition to offering our customers a wide assortment, we also wanted to provide them with a unique shopping
experience. We are focused on providing outstanding customer service through our DXL stores, with larger fitting rooms and
professional, trained associates providing personal attention. With the initial success of this store format, we made a similar change to
our e-commerce business in fiscal 2011 when we launched our DestinationXL.com website (now dxl.com). In fiscal 2019, we closed
our five remaining Rochester Clothing stores.

OUR BUSINESS

We operate as an omni-channel retailer of big & tall men’s clothing and shoes. Through our multiple brands, which include both
branded apparel and private-label, we provide a premium, personalized shopping experience, whether in-store or digitally, with a
broad range of merchandise at varying price points, catering from the value-oriented customer to the luxury customer. Our objective is
to appeal to all of our customers by providing a good, better, best array of product assortments in all primary lifestyles with multiple
and convenient ways to shop.

What is unique about our business is our proprietary fit, our ability to manage an array of sizes, and optimizing our in-stock position
throughout each season. Our best-selling pant has 58 size combinations and a unique specification as compared to an average retailer
who may only have 15 different size combinations. We maintain a consolidated inventory across all channels that enables us to
manage our in-stock position of all sizes effectively, ultimately improving customer service. Moreover, our planning and allocation
methodologies, with respect to store assortment planning, help to optimize each location’s market potential without excessive
inventory levels.

Our DXL retail stores, e-commerce site, dxl.com, and mobile app cater to all income demographics and offer our customers
merchandise to fit a variety of lifestyles from casual to business, young to mature, in all price ranges and in all large sizes from XL
and up. In addition, we also offer a selection of shoes in sizes 10W to 18W on our website at dxl.com. Our Casual Male XL retail
stores primarily carry moderate-priced branded and private-label casual sportswear and dresswear. We also operate Casual Male XL
outlets and DXL outlets for our value-oriented customers. Through digital marketplaces, we are able to extend our reach, by providing
a select offering of our merchandise to new customers who may not be current DXL customers.

BUSINESS STRATEGY

The structural changes to our business model and the digital transformative work we have accomplished is driving our customers to
engage with our brand in new and meaningful ways which together create a bright future for DXL. We strive to deliver a
differentiated experience that we believe will resonate with big and tall guys everywhere and our business strategy remains focused on
driving initiatives in marketing, technology, and merchandising.

In fiscal 2022, our key initiatives include the following:

 Digital growth. We have seen substantive growth in our direct business over the past two years and we believe that this

shows the sustainability of our digital transformation and our ability to stand out as an omni-channel retail company. This
digital growth is not just limited to our DXL.com website and mobile app lead; we have seen growth from third-party
marketplaces. We offer our B&T Essentials on Amazon Marketplace, specifically aimed at the value-oriented consumer. We
believe these additional avenues will attract a new customer to DXL and increase our brand awareness. We look to further
build upon these objectives in fiscal 2022.

 Marketing initiatives. We have executed a marketing strategy that is responsive to changes in customer shopping habits and

behaviors through CRM segmentation, unique personas and personalization of digital interaction such as one-to-one
marketing email messaging. Our focus in fiscal 2022 will be building brand awareness to achieve greater market share, the
acquisition of new customers, and investing in customer reactivation. For fiscal 2021, our new-to-file increased 27% as
compared to fiscal 2019. We want to build off of that growth in fiscal 2022. Our marketing efforts will continue to be
primarily digitally-driven, as we continue to develop a more personalized one-on-one connection with our customers.

 Merchandising initiatives. Over the past few years, we have narrowed our assortment, reducing the number of brands we

carry and instead focusing on the development of the assortments and exclusivity. Beginning in the spring of fiscal 2022, we
will be adding merchandise from Nautica and vineyard vines to our existing list of exclusive brands. We are aiming to add
even more brand exclusivity to our current merchandise selection, allowing us to differentiate ourselves within the big and

tall market. Since the latter half of fiscal 2020, we have shifted to a more full-price messaging with fewer merchandise
discounts, separating us from other retailers by focusing on our proprietary fit, exclusive merchandise selection and the
unique DXL shopping experience.

MERCHANDISE

We offer our customers a broad assortment of apparel that is appropriate to our diverse customer base. Regardless of our customers’
age, socioeconomic status, or lifestyle preference, we are able to assemble a wardrobe to fit their apparel needs. We offer such
assortments in both private-label product and a wide array of brand-name labels. With over 6,000 styles available, we carry tops in
sizes up to 8XL and 8XLT, bottoms with waist sizes 38” to 70”, and shoes in sizes 10W to 18W. Big and tall is all we do.

What sets us apart from our competitors is our proprietary fit. We are different because our fit is different. Our merchandise is not just
an extension of regular sizes. The fit is built from unique specifications for every size and style, with specific design features for the
big and tall customer.

Our stores are merchandised to showcase entire outfits by lifestyle, including traditional, active, modern and denim. This format
allows us to merchandise key items and seasonal goods in prominent displays and makes coordinating outfits easier for the customer
while encouraging multi-item purchases. This lifestyle layout also allows us to manage store space and product assortment effectively
in each market to target local demographics. The key item strategy is also fully integrated by lifestyle, allowing us to focus on
merchandise presentation and offer our customers a compelling value proposition.

Merchandise assortments in our DXL stores are organized not only by lifestyle but, within each lifestyle, the assortments are shown in
a “good,” “better” and “best” visual presentation. With the “best” merchandise assortments featured most prominently in the DXL
store, our customers are able to visualize current fashion trends and select their wardrobes within their desired price points in a
convenient manner. Our website and select DXL stores also offer certain “luxury” brands.

We carry over 100 well-known national brands (“branded apparel”) as well as a number of our own private-label lines within our
“good,” “better” and “best” price points. The penetration of branded apparel in a specific DXL store can range from 39% to 80%,
depending on several factors, but on average, approximately half of the assortment is branded apparel.

Several of the national brands that we carry, in sizes 2XL and above, are sold exclusively by us in our stores and on our website and
may be available on the brand’s website. In January 2022, we announced that we were adding Nautica and vineyard vines to our list of
exclusive brands for Spring 2022. In addition to our exclusive brands, we also work with several other national brands to offer a
unique, curated merchandise assortment, in sizes 2XL and above, that are exclusively sold in our stores and on our website and are not
available from the brand’s own website. These offerings are a subset of the larger merchandise offering that we carry for these
respective brands.

Value-Priced Apparel -“Good” Merchandise

For our value-oriented customers, we carry Champion, Lee, Wrangler and Reebok. Within our product assortment for Champion, we
offer exclusive styles specially curated for our customers. In addition, we carry several value-priced private label lines:

 Harbor Bay® was our first proprietary brand and it is a traditional line that continues to represent a significant portion of our

business, specifically in terms of our core basic merchandise.

 Gold Series™ is our core performance offering of tailored-related separates, blazers, dress slacks, dress shirts and neckwear that

blends comfort features such as stretch, stain resistance and wrinkle-free fabrics with basic wardrobe essentials.

 Synrgy™ targets the customer looking for a contemporary/modern look.

 Oak Hill® is a premier line catering to those customers looking for slightly more style and quality than our Harbor Bay line but

still in a traditional lifestyle.

 True Nation® is a denim-inspired line consisting of vintage-screen t-shirts and wovens and is geared towards our younger

customers.

 Society of One® is an activewear brand that offers versatile styling options and is grounded by performance technology.

Moderate-Priced Apparel -“Better” Merchandise

We offer our customer an extensive selection of quality sportswear and dress clothing at moderate prices carrying well-known brands
such as: Cutter & Buck®, Levi's®, Columbia, Carhartt®, and Jockey®. Our exclusive brands in this price range in O’Neill®, Nautica®
and Nautica Jeans®, Adidas Golf® and vineyard vines®. Within our product assortment for Callaway®, Lacoste®, Majestic and Tommy
Bahama® we also offer exclusive styles specially curated for our customers.

Higher-End Fashion Apparel -“Best” Merchandise

Within this higher-end price range, we carry a broad selection of quality apparel from well-known branded manufacturers, such as The
North Face®, Polo Ralph Lauren®, Jack Victor®, Michael Kors®, and Tallia®. Our exclusive brands in this price range include Brooks
Brothers®, JOE’S® Jeans, 7 for all Mankind®, and Robert Barakett®. Within our product assortment for Psycho Bunny®, Lucky and
Robert Graham® we also offer exclusive styles specially curated for our customers.

Shoes

Our DXL website offers an assortment of footwear, with a broad selection from casual to formal, in varying price points. We currently
have a selection of more than 200 styles of shoes, ranging in sizes from 10W to 18W, including designer brands such as Cole Haan®,
Timberland®, Sketchers, New Balance, Reebok and Deerstags.

STORE CHANNEL

DXL Men’s Apparel Stores

At January 29, 2022, we operated 220 DXL retail stores. Our DXL store concept brings all of our brands together in one format.
Within this format, we cater to our diverse customer base, with merchandise representing all price points, from our higher-end brands
to value-oriented brands, and all lifestyles, from business to denim. The size of our DXL stores averages 7,600 square feet, but since
fiscal 2016 we have opened smaller (5,000-6,500 square feet) DXL stores. Because of the smaller size of these stores, they carry a
smaller product offering than our other DXL stores but are representative of the “good, better, best” merchandise variety. Our DXL
stores are located on real estate that is highly visible, often adjacent to high-performing regional malls or other high-traffic shopping
areas.

Our DXL stores offer up to three times the product offering of a Casual Male XL store. Depending on the customers in each respective
market, we can adjust the appropriate mix of merchandise, with varying selections from each of our price points, to cater to each
demographic market.

Over the past few years, we have rebranded select Casual Male XL retail and outlet stores to the DXL retail and outlet store concept.
In many markets, rebranding a Casual Male XL store to a DXL store provides a viable alternative to the more costly endeavor of
relocating a Casual Male XL store to new DXL real estate. In addition, the converted stores benefit from DXL advertising. We are
actively reviewing opportunities to relocate or convert Casual Male XL stores to DXL and we are reviewing white space opportunities
in markets where our store footprint is underpenetrated. We expect to continue to invest in stores over the next several years as we
further strengthen the store portfolio.

Casual Male XL Retail Stores

At January 29, 2022, we operated 35 Casual Male XL full-price retail stores, located primarily in strip centers or stand-alone locations.
The majority of the merchandise carried in our Casual Male XL stores is moderate-priced basic or fashion-neutral items, such as jeans,
casual slacks, t-shirts, polo shirts, dress shirts and suit separates. These stores also carry a full complement of our “better” private label
collections. The average Casual Male XL retail store is approximately 3,300 square feet.

DXL Outlet /Casual Male XL Outlet Stores

At January 29, 2022, we operated 16 DXL outlet stores and 19 Casual Male XL outlet stores designed to offer a wide range of casual
clothing for the big & tall customer at prices that are generally 20-25% lower than our moderate-priced merchandise. Much of the
merchandise in our outlet stores is offered at discounted prices to cater to the value-oriented customer. In addition to private-label and
branded merchandise at our “good” price tier, our outlets also carry clearance product obtained from DXL and Casual Male XL stores,
offering the outlet customer the ability to purchase branded and fashion product for a reduced price.

The average DXL outlet is approximately 5,000 square feet and the average Casual Male XL outlet store is approximately 3,000
square feet.

DIRECT CHANNEL

Our direct business is a critical channel for growing sales and market share through new customer acquisition and digital engagement
of the active file. In the past two years, our direct business grew 45.3% in fiscal 2021 as compared to fiscal 2019 and represented
approximately 31.0% of our total retail sales in fiscal 2021, as compared to 23.1% of our retail sales in fiscal 2019. Through our
digital efforts and marketplace presence, we are creating brand awareness and attracting a new customer to DXL. For fiscal 2021, our
new-to-file increased 27% as compared to fiscal 2019. We believe that this new-to-file growth indicates that our investments in
digital marketing and the optimization of our digital infrastructure are resonating with new customers.

We define our direct business as sales that originate online, whether through our website, our app, those initiated online at the store
level, our Guest Engagement Center, or through a third-party marketplace. We want to serve our customers wherever and how they
want to shop, whether in-person at a store, over the telephone, or online via a computer, smartphone or tablet.

A key to being a successful omni-channel retailer is having the ability to showcase all of our store inventories online, resulting in
additional transactions that are initiated online, but are ultimately completed in store. In addition, our stores are able to fulfill an order
for an item that is out-of-stock in our warehouse. This capability has not only resulted in incremental sales, but it has also helped us
reduce clearance merchandise at the store level and manage margins.

DXL Website and App

Our DXL website and app have been instrumental in our growth over the past two years, with sales from our website and app together
increasing 55.3% from fiscal 2019. We continue to see our consumers shift to online shopping helping to drive higher new customer
acquisition for the website business.

Digital Sales at Store Level

In support of our omni-channel approach, our store associates use our website to help fulfill our in-store customers’ clothing needs. If
a wider selection of a lifestyle, color or size of an item is not available in our store, then our store associates can order the item for our
customer online through our direct channel and have it shipped to the store or directly to the customer. Our customers also have the
ability to shop-by-store and pick-up in store on the same day.

Digital Marketplaces

We continue to broaden our reach through digital, third-party marketplaces. A large portion of our assortment is available on
Amazon.com and Target.com. Digital marketplaces provide us an opportunity to drive awareness, grow our customer base and
introduce new customers to our brand.

WHOLESALE CHANNEL

Our wholesale business focuses on the product development, manufacturing and distribution of big and tall product. This initiative
allows us to leverage our existing infrastructure, including DXL’s expertise in technical design and global sourcing. Our wholesale
business was driven primarily by our relationship with Amazon. Based on several factors, including low margins, volatility in the
global supply chain, increasing lead times and the shifting dynamics of the business, the Company and Amazon have agreed to end the
wholesale relationship.

MERCHANDISE PLANNING AND ALLOCATION

Our merchandise planning and allocation function is critical to the effective management of our inventory, store assortments, product
sizes and overall gross margin profitability. The merchandise planning and allocation team has an array of planning and replenishment
tools available to assist in maintaining an appropriate level of inventory, in-stock positions at the stores and for the direct channel, and
pre-season planning for product assortments for each store and the direct channel. Additionally, in-season reporting identifies
opportunities and challenges in inventory performance. Over the past several years, we have made, and we will continue to make,
investments in implementing best practice tools and processes for our merchandise planning and allocation.

Our core merchandise made up approximately 42% of our merchandise assortment in fiscal 2021. Our planning and allocation team
estimates quantity and demand several months in advance to optimize gross margin and minimize end-of-season merchandise for all
seasonal merchandise. We develop customized assortment strategies by store that accentuate lifestyle preferences for each particular
store.

Our merchandising data warehouse provides the merchandising team with standardized reporting for monitoring assortment
performance by product category and by store, identifying in-stock positions by size and generally monitoring overall inventory levels
relative to selling. At season end, we analyze the overall performance of product categories, overall assortments and specific styles by
store to focus on the opportunities and challenges for the next season’s planning cycle.

Utilizing a set of specific universal reporting tools, the merchandise planning and allocation team is able to fulfill their daily, weekly
and monthly roles and responsibilities. These reporting tools provide focused and actionable views of the business to optimize the
overall assortment by category and by store. We are confident that our inventory performance is optimized by having all members of
the merchandise planning and allocation team follow a standardized set of processes with the use of standardized reporting tools.

STORE OPERATIONS

We believe that our store associates are the key to creating the highest quality experience for our customers. The culture in our stores
is to be guest centric in an effort to engage and build a relationship with our guests. Our overall goal is to accomplish three key
initiatives in our stores. The first is that we strive to build relationships with all of our guests. The second is that we believe our stores
need to be clean, neat and organized in an effort to allow the "just-looking" customer to find what he needs with ease. The last
component is our stores serving as mini-distribution centers. The majority of our stores are able to fulfill customer orders for product
that we may not have in our distribution center. Our associates are well versed in not only the product selection carried in their specific
store, but also the product selection carried online. With a point-of-sale system that can access items online for the customer who is
physically in the store, our associates are able to fulfill all of their customers’ needs.

Our multi-unit, field management team receives extensive training on recruiting associates who are the correct fit for our stores. All
new DXL store management team hires are trained extensively through senior peer trainers throughout the country. We believe having
a mix of internal promotes (store manager to Regional Sales Manager) as well as external hires with extensive multi-unit background
gives us an inclusive and diverse Regional Sales management team. Regional Vice Presidents give us touch-points in the field in
addition to our Regional Sales Managers and store management team to ensure consistency in executing our standards and all
programs and processes we deem important to our success.

Each new member of the store management team goes through extensive training with their Regional Sales Manager and a peer Store
Manager. We believe our training system, together with monitoring sales metrics to help identify opportunities for further training,
will improve sales productivity and strengthen our customer’s brand loyalty.

Our field organization is overseen by our Senior Vice President of Store Sales and Operations, Regional Vice Presidents, Regional
Sales Managers, and a Store Operations Team, who provide management development and guidance to individual store managers.
Each Regional Sales Manager is responsible for hiring and developing store managers at the stores assigned to that Regional Sales
Manager’s market, and for the overall operations and profitability of those stores. Each store is staffed with a store manager, assistant
manager and key holders. The store manager is responsible for achieving certain sales and operational targets. Our stores have an
incentive-based commission plan for managers and selling staff to encourage associates to focus on our customer’s wardrobing needs
and sales productivity.

The COVID-19 pandemic continued to have an impact on our store operations during fiscal 2021. While the majority of our stores
remained opened throughout fiscal 2021, we experienced some limited store closures throughout the year as a result of reduced store
operating hours and staff shortages. Several of the safety protocols we implemented in fiscal 2020 are still in place. In addition, the
majority of our stores continue to offer the option for no-contact, curbside pickup, through our BOPAC (buy online and pickup at
curbside) and BOPIS (buy online pick-up in store) programs. For the safety of our field organization, our stores are equipped with
iPads to enable our Regional Sales Managers and members of our senior leadership team the ability to engage with stores on a more
frequent basis without the risk of travel.

MARKETING AND ADVERTISING

We believe that our marketing initiatives are key to driving our sales growth by increasing traffic to our stores, website and app. We
are transforming our brand positioning by targeting our addressable market and focusing on our distinct advantages, which is a brand
built around our proprietary fit, a specially-curated, extensive and often exclusive merchandise offering and an experience built around
the respect, value and trust for our customers. Our focus is to acquire new customers and achieve a greater lifetime value across our
entire customer file.

We have shifted our marketing strategy away from a broad-based shotgun advertising to a more targeted, personalized, data-driven
model where we can segment and ultimately engage differently with each of our customers based on their shopping behaviors across
all our buying channels. We adopted a stringent, analytical perspective to our marketing program, focusing on understanding
incremental outcomes in addition to the “return on ad spend” throughout all of our programs. This data-driven philosophy extends
across all of our marketing initiatives as we look at new ways to engage our customers. Our on-going work on enhancing our customer
segmentation will ultimately drive our long-term marketing strategy, enabling us to create targeted and personalized content and
messaging to our various customer segments.

Our marketing programs includes email, direct mail, loyalty program, direct marketing, digital marketing, social media, and streaming
media, among others. Driving new-to-file growth and strengthening our brand positioning with our active file are key to our overall
long-term growth and we expect to increase our marketing costs in fiscal 2022 to approximately 6% of sales to support these
initiatives. For fiscal 2021, marketing costs were 4.7% of sales.

GLOBAL SOURCING

Our global sourcing strategy is a balanced approach, which considers quality, cost and lead-time, depending on the requirements of the
program. We believe our current sourcing structure meets our operating requirements and provide capacity for growth. The growth
and effectiveness of our global direct sourcing program is a key component to the strength of merchandise margins.

We have built a strong internal team with extensive experience that is responsible for managing an international network of vendors
and suppliers across the globe. We have established strong relationships with many of the leading factories and mills across the globe.
Our sourcing network consists of over 28 factories in nine countries which are experts in big & tall sizing and production. In fiscal
2021, approximately 52% of all our product needs were sourced directly. We manufacture a significant percentage of our private-label
merchandise in Southeast Asian countries consisting of Vietnam, Bangladesh, Cambodia and India. We continue to reduce
dependency on China, inclusive of our raw materials and trims, and have moved certain programs into the Western Hemisphere with
duty-free opportunities such as Nicaragua and Mexico.

In 2020, we retained Elevate Ltd., a global leader in supply chain assessment, and instituted 4-Pillar audits of our manufacturing
facilities. Our intent is to increase our social, environmental and ethical sustainability by utilizing Elevates audit tool, "ERSA", which
stands for ELEVATE Responsible Sourcing Assessment. ERSA 2.0 covers social compliance, human rights, environmental business
ethics, and worker’s sentiment surveys. All audits can be found on their EIQ tool which is a web-based analytical system on which
we participate in their Ethical Trade Audit platform. Through collaboration with Elevate Ltd., we are currently pursuing a “5-Pillar
Audit”, which includes traceability of both raw materials and the equipment used to produce finished goods. We expect to roll out this
program in 2022. Our intention is to increase our audit pillars to include all of our raw material suppliers that procure fabric, trims and
inner components of our products.

In an effort to minimize foreign currency risk, all payments to our direct sourced vendors and buying agents are made in U.S. dollars
with payment on account.

DISTRIBUTION

All of our retail distribution operations are centralized at our headquarters located in Canton, Massachusetts. We believe that having a
centralized distribution facility maximizes the selling space and in-stock position of our stores and reduces the necessary levels of
back-room stock. In addition, the distribution center provides order fulfillment services for our e-commerce business. In-bound calls
for our e-commerce business are received at our Canton facility and are primarily fulfilled by our distribution center. If an order
cannot be fulfilled by our distribution center, the order is completed at the store level. For our wholesale business, during fiscal 2021
we utilized three coastal third-party cross-dock facilities.

Our supply chain technology provides visibility for imports and domestic deliveries giving our buyers accurate shipping information
and allowing the distribution center to plan staffing for arriving freight, resulting in reduced costs and improved receipt efficiency.

Our warehousing application and labor management system enable us to streamline our distribution processes, enhance our in-transit
times, and reduce our distribution costs. We will continually work to make improvements and upgrades to our software.

Since 2003, we have utilized United Parcel Services (“UPS”) for all of our store shipments as well as our domestic customer
deliveries. By utilizing UPS, we are able to track all deliveries from the warehouse to our individual stores, including the status of in-
transit shipments. In addition, we are able to provide our direct customers with Authorized Return Service and Web labels, making
returns more convenient for them. In October 2019, we renewed our contract with UPS through October 2022. We also entered into
an agreement with the United States Postal Service to utilize their services when shipping from stores.

In order to service our International customers, we have contracted with a global e-commerce company for payment and shipment
services. Through this service, international customers view and pay for products in their local currency. Our vendor then ships
directly to our customer, which we believe helps avoid potential fraud and currency exchange rate risks.

MANAGEMENT INFORMATION SYSTEMS

The infrastructure of our management information systems is a priority to us. We believe that the investments we have made in this
regard have improved our overall efficiency and improved our access to information enabling timely, data-driven decisions.

Our management information systems consist of a full range of retail merchandising and financial systems, which include
merchandise planning and reporting, distribution center processing, inventory allocation, sales reporting, and financial processing and
reporting. We believe that our current infrastructure provides us the ability and capacity to process transactions more efficiently and
provides our management team with comprehensive tools with which to manage our business.

Using a retail business intelligence solution, we are able to integrate data from several sources and provide enterprise-wide analytics
reporting. Over the past few years, we have continued to develop a custom Assortment Suite application. In an effort to improve our
inventory management, we have created a standardized set of “best practices” for both our merchandise planning and allocation
groups.

Our direct and retail channels maintain a shared inventory system and we operate a single-system platform for our DXL and Casual
Male XL stores to deliver improved efficiencies.

During fiscal 2021, we began the process of upgrading our Assortment Suite application to leverage business intelligence and
predictive analytics to provide high-impact insights into core merchandising tasks. In addition, we continued to upgrade our security
measures, including employing a Security Incident Event Management system.

During fiscal 2022, we will continue upgrading our Assortment Suite and plan to roll-out a new point-of-sale system.

COMPETITION

Our business faces competition from a variety of sources, including department stores, mass merchandisers, other specialty stores and
discount and off-price retailers that sell big & tall men’s clothing. While we have successfully competed on the basis of merchandise
selection, comfort and fit, customer service and desirable store locations, there can be no assurances that other retailers, including e-
commerce retailers, will not adopt purchasing and marketing concepts similar to ours. Discount retailers with significant buying
power, such as Wal-Mart and J.C. Penney, represent a source of competition for us. The direct business has many competitors,
including the King Size catalog and website as well as online marketplaces, such as Amazon.

The United States big & tall men’s clothing market is highly competitive with many national and regional department stores, specialty
apparel retailers, single market operators and discount stores offering a broad range of apparel products similar to ours, the similarity
being that the clothes they sell are intended for big and tall men. Besides retail competitors, we consider any casual apparel
manufacturer operating in outlet malls throughout the United States to be a competitor in the casual apparel market. We believe that
we are the only national operator of men’s apparel stores focused exclusively on the men’s big & tall market.

SEASONALITY

Historically, and consistent with the retail industry, we have experienced seasonal fluctuations as it relates to our operating income,
net income, and free cash flow. Traditionally, a significant portion of our operating income, net income, and free cash flow is
generated in the fourth quarter, because of the holiday season. Our inventory is typically at peak levels by the end of the third quarter,
which represents a significant use of cash, which is then relieved in the fourth quarter as we sell-down our inventory through the
holiday shopping season.

TRADEMARKS/TRADEMARK LICENSE AGREEMENTS

We own several service marks and trademarks relating to our businesses, including, among others, “Destination XL®”, “DXL®”,
“DXL Mens Apparel®”, “Big on Being Better®”, “Casual Male®”, “Casual Male XL®”, “Harbor Bay®”, “Oak Hill®”, “Continuous
Comfort®”, “Synrgy™”, “Society of One®” and “True Nation®”. We also hold a U.S. patent for an extendable collar system, which is
marketed as “Neck-Relaxer®” and a U.S. copyright for a no-iron hang tag.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

At DXL, corporate social responsibility and sustainability has been a focus for many years and we recognize the importance of
environmental, social and governance ("ESG") issues. We are diligently working to enhance and develop a platform that we can share
with our stakeholders. During fiscal 2021, we formed the Corporate Social Responsibility Committee, comprising a cross-discipline
of corporate management and engaged with a third-party firm to assist us in the development of the Company's ESG policies and
initiatives.

HUMAN CAPITAL MANAGEMENT

As of January 29, 2022, we had 1,353 employees. We hire additional temporary employees during the peak Fall and Holiday seasons.
None of our employees is represented by any collective bargaining agreement. Our associates are our greatest asset and we are
committed to providing them a safe and healthy work environment. Each associate is required to sign a set of policies that include,
among other policies, the code of ethics, anti-harassment and procedures for raising a complaint. Our policies also contain protection
of human rights and prohibit, among other things, the use of child labor or forced, bonded or indentured labor.

Inclusion and Diversity

We are committed to inclusivity, acceptance, and equality. Since 2017, we have had a diversity and inclusion initiative called
“Normalizing the Brand.” The program brings awareness to unconscious bias and focuses on ensuring that the composition of our
organization looks and feels like the communities where we live and serve. We have policies and training in place with respect to
anti-discrimination and anti-harassment, among others, and provide our associates with access to an anonymous hot-line for reporting
any concerns. Throughout the year, we require our associates to participate in educational videos. In early 2022, we will be launching
a survey to all associates, specifically focused on Inclusion and Diversity. In early 2021, we joined with CEO Action for Diversity &
Inclusion, a coalition of nearly 2,000 CEOs, pledging to advance diversity and inclusion in the workplace. By signing on to this
commitment, we have pledged to take action to cultivate a workplace where diverse perspectives and experiences are welcomed and
respected, and where employees feel encouraged to discuss diversity and inclusion without retribution.

Workplace, Culture and Career Development

We are committed to providing our associates an environment where they have an opportunity to provide input on issues affecting the
Company’s workforce and the employer-associate relationship. Periodically through the year, we encourage feedback and ideas from
our associates through our annual engagement surveys and periodic pulse surveys. Perhaps most importantly, we promote
professional and career development and mentorship programs. In 2014, our Associate Engagement & Development Committee
implemented the DXLG Mentor Program, which pairs up to 20 mentees with mentors for one-year periods. In April 2016, the DXL
Women’s Leadership Group was formed with a mission of “Women supporting, educating and empowering each other @ DXLG”. It
started as a pilot program and quickly expanded to now include over 40 female leaders, both people and process managers, in the
corporate office and field. In addition, for the past four years, we have presented Leadercast, a platform for leadership development
content (held annually in May) and Leadercast Women (held annually in October) as a host site at our corporate headquarters. For the
past two years, the programs were made available via an online platform. Our Associate Engagement & Development Committee
organizes “Lunch, Learn, Lead” and “Coffee Talk” sessions throughout the year to provide our associates an opportunity to gain
insight on a variety of topics, such as, DXL’s social responsibility initiatives, TED talks, Global Sourcing, Normalizing the Brand and
Technology. We also have partnered with Marist College to provide our DXL associates and their immediate adult family members a
25% discount toward on-line tuition costs.

Compensation and Benefits

Our compensation programs are designed to pay our associates competitively in the market, based on their skills, qualifications, role,
and abilities. Our benefits are designed to help employees and their families stay healthy and help them balance their work and
personal lives. These benefits include health and wellness, paid time off, employee assistance, competitive pay, career growth
opportunities, paid volunteer time, product discounts, and a culture of recognition. The challenges created by the global pandemic
brought mental health awareness to the forefront. We began a program with CALM, an app that provides our home office associates
an opportunity to incorporate meditation and other mindfulness activities into their daily routines as well as BurnAlong, a free online
health, wellness and fitness platform available to all associates. We also provide an Employee Assistance Program (EAP) which
provides 24/7 assistance to associates and their family members for a variety of issues such as stress, family, parenting, finances.

AVAILABLE INFORMATION

Our corporate website is www.dxl.com. Our investor relations site is http://investor.dxl.com. We make available through our website,
free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all
amendments to such reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, as soon
as reasonably practicable after we have electronically filed such material with, or furnished such materials to, the Securities and
Exchange Commission. The SEC maintains an internet site that contains reports, proxy and information statements, and other
information for issuers that file electronically with the SEC at http://www.sec.gov.

Item 1A. Risk Factors

The following risk factors are the important factors of which we are aware that could cause actual results, performance or
achievements to differ materially from those expressed in any of our forward-looking statements. We operate in a continually
changing business environment and new risk factors emerge from time to time. Other unknown or unpredictable factors also could
have material adverse effects on our future results, performance or achievements. We cannot assure you that our projected results or
events will be achieved or will occur.

Risks Related to Our Company and Our Industry

We may not be successful in executing our strategy and growing our market share.

For us to be successful in the future and maintain growth, we must be able to continue increasing our share of the big & tall men’s
apparel market. Our growth is dependent on our ability to continue to build upon our DXL brand, maintain our existing customers and
continue to attract new customers. Our failure to execute our strategy successfully could prevent us from growing our market share,
which could have a material adverse effect on our results of operations, cash flows and financial position, including if we were unable
to:

 grow our DXL e-commerce business;

 develop an effective modern marketing program to build store and digital awareness as well as increase store and online

traffic, attract customers across all channels, and grow sales;

 predict and respond to fashion trends, while offering our customers a broad selection of merchandise in an extended selection

of sizes;

 grow our existing customer base;

 attract and retain new customers across all channels;

 hire qualified store management and store associates;

 continue to grow and then sustain the number of transactions, units-per-transaction and share of wallet; and

 operate at appropriate operating margins.

Our marketing programs and efforts to drive traffic and convert that traffic into an increased loyal customer base are critical to
achieving market share growth within the big & tall men’s apparel market and may not be successful.

Our ability to increase our share of the big & tall men’s apparel market is largely dependent on effectively marketing our merchandise
to all of our target customers in several diverse market segments so that they will become loyal shoppers who spend a greater portion
of their wallets on our product offerings. In order to grow our market share, we depend on the success of our marketing and
advertising in a variety of ways, including streaming media advertising, advertising events, loyalty programs, direct mail, and digital
marketing, including social media and customer prospecting. Our business is directly impacted by the success of these efforts and
those of our vendors. Future marketing efforts by us, our vendors or our other licensors, may be more costly than prior years and, if
not successful, may negatively affect our ability to meet our sales goals and gain market share.

Our direct business is a significant component of our growth strategy, and the failure to develop our e-commerce and internet
infrastructure could disrupt our business and negatively impact our sales.

We continue to have increasing levels of sales made through online shopping and via mobile devices. We have made significant
investments in capital spending and labor to develop these channels and increased investments in digital marketing to attract new
customers. The growth of our overall sales is dependent on customers’ continuing to expand their online purchases in addition to in-
store purchases. Over the past two fiscal years, we have seen significant growth in our direct business, with revenue for fiscal 2021
increasing 45.3% from fiscal 2019. While it is our objective to continue to grow this business, there can be no assurance that this
growth will continue or be sustainable.

Our success in growing our direct business will depend in part upon our development of an increasingly sophisticated e-commerce
experience and infrastructure. Increasing sophistication requires that we provide additional website features, functionality and
messaging in order to be competitive in the marketplace and maintain market share. We continually update our website features, but
we cannot predict future trends and required functionality or our adoption rate for customer preferences. In addition, we are
vulnerable to additional risks and uncertainties associated with e-commerce sales, including security breaches, cyber-attacks,
consumer privacy concerns, changes in state tax regimes and government regulation of internet activities. Our failure to respond to

these risks and uncertainties successfully could reduce our direct sales, increase our costs and diminish our growth prospects, which
could negatively affect our operating results.

If we are unable to develop and implement our omni-channel initiatives successfully, our market share and financial results could
be adversely affected.

Our customer’s shopping behavior continues to evolve across multiple channels and we are working to meet his needs, with the real
time store inventory visibility, our mobile app, the expansion of our BOPIS (buy online pick up in stores) and BOPAC (buy online
pick up curbside) to help our customers continue to shop during the pandemic. We consider ourselves a customer centric omni-
channel retailer, and we continue to make ongoing investments in our information technology systems to support evolving omni-
channel capabilities.

Omni-channel retailing is rapidly evolving and our success depends on our ability to anticipate and implement innovations in sales and
marketing technology and logistics in order to appeal to existing and potential customers who increasingly rely on multiple channels
to meet their shopping needs. In addition, our competitors are also investing in omni-channel initiatives, some of which may be more
successful than our initiatives.

If the investment in our omni-channel initiatives is not successful, our systems are unable to support such initiatives, or if our
competitors are more successful, our financial results and our market penetration may be adversely affected.

The loss of, or disruption in, our centralized distribution center could negatively impact our business and operations.

The majority of our merchandise for our stores and e-commerce operations is received into our centralized distribution center in
Canton, Massachusetts, where it is then processed, sorted and shipped to our stores or directly to our customers. We depend in large
part on the orderly operation of this receiving and distribution process, which depends, in turn, on adherence to shipping schedules and
effective management of the distribution center. Although we believe that our receiving and distribution process is efficient and well-
positioned to support our strategic plans, events beyond our control, such as disruptions in operations due to fire or other catastrophic
events, employee matters or shipping problems, or disruptions in our distribution center, including potential restrictions due to the
pandemic, could result in delays in the delivery of merchandise to our stores or directly to our customers. The COVID-19 pandemic
has also resulted in labor shortages, which may affect our ability to process and ship inventory in a timely manner.

With all of our management information systems centralized in our corporate headquarters, any disruption or destruction of our
system infrastructure could materially affect our business. This type of disaster is mitigated by our offsite storage and disaster
recovery plans, but we would still incur business interruption that may impact our business a significant period of time.

Although we maintain business interruption and property insurance, we cannot be sure that our insurance will be sufficient, or that
insurance proceeds will be timely paid to us, in the event our distribution center is shut down for any reason or if we incur higher costs
and longer lead times in connection with a disruption relating to our distribution center.

The global impact of the COVID-19 pandemic and its variants have had and, based on the current status and uncertainty, may
continue to have an adverse effect on our business, financial results, liquidity, supply chain and workforce.

Since 2020, the COVID-19 pandemic and its variants have caused global uncertainty and disruption and has had a material impact on
our business, predominately in fiscal 2020 and early 2021. While we saw significant recovery in our business during fiscal 2021,
continued risk and uncertainty remain particularly related to the potential for new variants, current and future actions that may be
taken by federal, state and local agencies to mitigate any resurgences, the disruption and recovery of the global supply chain, the long-
term economic impact, inflationary pressures, and the continuing labor shortages.

Further, we also recognize that our business benefited from a certain level of pent-up demand and fiscal stimulus policy during fiscal
2021, which may have a negative impact our financial results in fiscal 2022 if we are not able to successfully manage the potential
shifts in consumer spending.

Even after the COVID-19 pandemic subsides, our business may be negatively impacted, specifically as it relates to the changes in
consumer spending behaviors, the labor market, the global supply chain and inflation, resulting from the pandemic.

Our business may be adversely affected due to disruptions in the global supply chain.

Disruptions in the global supply chain in foreign ports and shortages of vessels and shipping containers may impact our ability to
import inventory in a timely manner. The impact of COVID-19 and labor shortages on domestic ports has also created a similar
disruption in the supply chain and may continue to cause delays in the receipt and shipment of inventory. In addition, the recent

invasion by Russia of Ukraine may cause additional tariffs, sanctions, import/export restrictions and future actions that may have a
negative impact on the supply chain and may limit the availability of certain raw materials and associated cost. Furthermore, in the
event that commercial transportation is curtailed or substantially delayed, we may not be able to maintain adequate inventory levels of
important merchandise on a consistent basis, which would negatively impact our sales and potentially erode the confidence of our
customer base, leading to loss of sales and an adverse impact on our results of operations. Further, we may also incur incremental
freight costs which could negatively harm our gross margin rates.

Our business may be adversely affected if we are unable to manage our store portfolio successfully.

We lease all of our store locations. Renewing and renegotiating these leases at acceptable lease terms is critical to the profitability of
our stores. Since the start of the pandemic in March 2020, we have worked closely with our landlords to renegotiate and restructure
the majority of our lease portfolio. While sales from the majority of our stores returned to pre-pandemic levels in fiscal 2021, given
the ongoing variants, supply chain issues and labor shortages, certain stores may not be profitable and we may not be able to renew
existing agreements. We will continue to evaluate our store portfolio to optimize store profitability and omni-channel distribution. As
part of that evaluation, we may choose not to renew certain lease locations. We are actively reviewing opportunities to relocate or
convert Casual Male XL stores to DXL and we are reviewing white space opportunities in markets where our store footprint is
underpenetrated. We expect to continue to invest in stores over the next several years as we further strengthen the store portfolio, but
if we are unable to find locations or obtain favorable lease terms, we may not be able to grow or maintain our current store base.

We are dependent on third parties for the manufacture of the merchandise we sell.

We do not own or operate any manufacturing facilities and are therefore entirely dependent on third parties to manufacture the
merchandise we sell. Without adequate supplies of merchandise to sell to our customers in the merchandise styles and fashions
demanded by our particular customer base, sales would decrease materially and our business would suffer. We are dependent on these
third parties’ ability to fulfill our merchandise orders and meet our delivery terms. In the event that manufacturers are unable or
unwilling to ship products to us in a timely manner or continue to manufacture products for us, we would have to rely on other current
manufacturing sources or identify and qualify new manufacturers. We might not be able to identify or qualify such manufacturers for
existing or new products in a timely manner and such manufacturers might not allocate sufficient capacity to us in order to meet our
requirements. Our inability to secure adequate and timely supplies of private-label merchandise would negatively impact proper
inventory levels, sales and gross margin rates, and ultimately our results of operations.

In addition, even if our current manufacturers continue to manufacture our products, they may not maintain adequate controls with
respect to product specifications and quality and may not continue to produce products that are consistent with our standards. If we
were forced to rely on manufacturers who produce products of inferior quality, then our brand and customer satisfaction would likely
suffer which would negatively impact our business. These manufacturers may also increase the cost to us of the products we purchase
from them. The Company publishes a Code of Conduct, which is a part of every agreement requiring compliance by the
manufacturing facilities.

The United States Treasury Department has placed sanctions on China’s Xinjiang Production and Construction Corporation ("XPCC")
for serious human rights abuses against ethnic minorities in China’s Xinjiang Uyghur Autonomous Region ("XUAR"). In addition, in
January 2021, the US Customs Border Protection (“CBP”) issued a Withhold Release Order on Products Made in Xinjiang region of
China released. In response to the problems in Xinjiang, we developed a Compliance Certificate of Traceability for our cotton
vendors. Although we prohibit our vendors from doing business with XPCC, we could be subject to penalties, fines or sanctions and
our brand could be harmed if any of the vendors from which we purchase product is found to have done business, directly or
indirectly, with XPCC.

We work with a third-party audit vendor to ensure a responsible and ethical supply chain. We are and will continue to pursue our
corporate responsibilities and create a positive effect on human rights as well as the environment. If, despite third-party audits, the
manufacturing facilities engage in workplace or human rights violations and we are unable to identify or correct it, it may negatively
affect our business and harm our brand.

Our business may be negatively impacted and we may be liable if third parties misappropriate proprietary information of our
customers and breach our security systems.

We may be harmed by security risks we face in connection with our electronic processing and transmission of confidential customer
information. The majority of our retail sales are settled through credit and debit card transactions. While our Board of Directors has a
Cybersecurity and Data Privacy Committee to oversee the monitoring and management of cyber risk and data privacy for our
Company, and we have not had any security breaches to date, any breach could expose us to risks of loss, litigation, and liability and
could adversely affect our operations as well as cause our shoppers to stop shopping with us as a result of their lack of confidence in
the security of their personally identifiable information, which could have a negative impact on our sales and profitability. We attempt

to limit exposures to security breaches and sensitive customer data through the use of “tokens” in connection with both in-store and
online credit card transactions, which eliminates the storage of credit card numbers. Like many retailers, we have seen an increase in
cyberattack attempts, predominantly through phishing and social engineering scams, and in particular, ransomware. While none of
these attempts has been successful, there can be no assurance that our continued security measures will be effective or sufficient in the
future. If third parties are able to penetrate our network security or otherwise misappropriate the personal information or credit card
information of our customers or if third parties gain unauthorized and improper access to such information, we could be subject to
liability. These liabilities could include claims for unauthorized purchases with credit card information, impersonation or other similar
fraud claims, or claims for other misuses of personal information, including unauthorized marketing purposes, and could ultimately
result in litigation. Liability for misappropriation of this information could be significant.

Further, if a third party were to use this proprietary customer information in order to compete with us, it could have a material adverse
impact on our business and could result in litigation.

Our business is highly competitive, and competitive factors may reduce our revenues and profit margins.

The United States big & tall men’s apparel market is highly competitive with many national and regional department stores, mass
merchandisers, specialty apparel retailers, discount stores and online retailers offering a broad range of apparel products similar to the
products that we sell. Besides retail competitors, we consider any manufacturer of big & tall men’s merchandise operating in outlet
malls throughout the United States to be a competitor. It is also possible that another competitor, either a mass merchant or a men’s
specialty store or specialty apparel catalog, could gain market share in big & tall men’s apparel due to more favorable pricing,
locations, brand and fashion assortment and size availability. Many of our competitors and potential competitors may have
substantially greater financial, manufacturing and marketing resources than we do.

The presence in the marketplace of various fashion trends and the limited availability of shelf space also can affect competition. We
may not be able to compete successfully with our competitors in the future and could lose market share. A significant loss of market
share would adversely affect our revenues and results of operations.

In addition, we maintain exclusivity arrangements with several of the brands that we carry. If we were to lose any of these exclusivity
arrangements or brands altogether, our revenues may be adversely affected.

Our ability to operate and expand our business and to respond to changing business and economic conditions will depend on the
availability of adequate capital.

The operation of our business, the rate of our expansion and our ability to respond to changing business and economic conditions,
depend on the availability of adequate capital, which in turn depends on cash flow generated by our business and, if necessary, the
availability of equity or debt capital. We will also need sufficient cash flow to meet our future obligations under our existing credit
facility.

The amount that we are able to borrow and have outstanding under our credit facility at any given time is determined using an
availability formula based on eligible assets. As a result, our ability to borrow is subject to certain risks and uncertainties, such as
advance rates and the amount and quality of inventory, which could reduce the funds available to us under our credit facility. In
addition, because of the disruptions in the supply chain, inventory levels may be lower than expected. This directly impacts our
borrowing base and there can be no assurance that we can effectively manage the balance of maintaining inventory and sufficient
availability, especially during peak selling periods.

We cannot makes assurances that our cash flow from operations or cash available under our credit facility will be sufficient to meet
our needs. If we are unable to generate sufficient cash flows from operations in the future, we may have to obtain additional financing.
If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly
restrict our operations and we cannot ensure we would be able to obtain refinancing or that such additional financing would be on
favorable terms.

Our business is seasonal and is affected by general economic conditions.

Our business is seasonal. Historically, a significant portion of our operating income has been generated during our fourth quarter
(November-January). If, for any reason, we miscalculate the demand for our products during our fourth quarter, our sales in that
quarter could decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could cause
our annual operating results to suffer. In addition, our operations may be negatively affected by local, regional or national economic
conditions, such as levels of disposable consumer income, inflation, consumer debt, interest rates, consumer confidence and other

macro issues. Due to our seasonality, the possible adverse impact from such risks is potentially greater if any such risks occurs during
our fourth quarter.

We may be unable to achieve our environmental, social and governance goals.

We are committed to corporate social responsibility and sustainability and we recognize the importance of environmental, social and
governance ("ESG") issues. During fiscal 2021, we formed the Corporate Social Responsibility Committee, comprising a cross-
discipline of corporate management and engaged with a third-party firm to assist us in the development of the Company's ESG
policies and initiatives.

Achievement of our initiatives is subject to risks and uncertainties and we may fail to achieve our objectives. We may also incur
additional costs and require additional resources to monitor, report, and comply with such ESG practices and regulations. We may
also face pressure from our stockholders, customers and employees to make accelerated and material advancements in these ESG
matters.

In addition, an increasing number of our stakeholders are considering sustainability factors when making related decisions regarding
employment, brand loyalty and investment. Failure to establish effective policies, procedures and metrics may negatively affect our
reputation, and it may be more difficult for us to compete effectively, all of which would have an adverse effect on our business,
operating results, and financial condition.

We may be unable to predict fashion trends and customer preferences successfully.

Customer tastes and fashion trends are volatile and tend to change rapidly. Our success depends in large part upon our ability to
predict effectively and respond to changing fashion tastes and consumer demands and to translate market trends to appropriate
saleable product offerings. If we are unable to predict or respond to changing styles or trends successfully and misjudge the market for
products or any new product lines, our sales will be impacted and we may be faced with a substantial amount of unsold inventory or
missed opportunities. In response, we may be forced to rely on additional markdowns or promotional sales to dispose of excess, slow-
moving inventory, which would decrease our revenues and margins. In addition, the failure to satisfy consumer demand, specifically
in our DXL stores and from our website, could have serious longer-term consequences, such as an adverse impact on our brand value
and the loss of market share to our competitors.

The loss of any of our key trademarks or licenses could adversely affect demand for our products.

We own and use a number of trademarks and operate under several trademark license agreements. We believe that certain of these
trademarks have significant value and are instrumental in our ability to create and sustain demand for and to market our products. We
cannot be certain that these trademarks and licensing agreements will remain in effect and enforceable or that any license agreements,
upon expiration, can be renewed on acceptable terms or at all. In addition, any future disputes concerning these trademarks and
licenses may cause us to incur significant litigation costs or force us to suspend use of the disputed trademarks.

General Risks That May Affect Our Business

If our long-lived assets become impaired, we may need to record significant non-cash impairment charges.

Periodically, we review our long-lived assets for impairment whenever economic events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. Specifically, if an individual store location is unable to generate sufficient future
cash flows, we may be required to record a partial or full impairment of that store’s right-of-use assets and its property and equipment.
In addition, significant negative industry or general economic trends, disruptions to our business and unexpected significant changes
or planned changes in our use of the assets (such as store relocations or closures) may also result in impairment charges. Due to the
uncertainty that remains regarding the duration of the pandemic and its impact on our store locations, we may need to take additional
impairment charges. Any such impairment charges, if significant, could adversely affect our financial position and results of
operations.

Changes to LIBOR may negatively impact us.

The London interbank offered rate (“LIBOR”) is the basic rate of interest used in lending between banks on the London interbank
market and is widely used as a reference for setting the interest rate on loans globally. Our current credit facility provides us an option
to convert some of our prime-based borrowings into short-term LIBOR contracts.

Regulators in the United Kingdom that oversee LIBOR have stated that they cannot guarantee LIBOR's availability beyond the end of
2021 and expects that reliance on LIBOR will be phased out through June 2023. In the absence of a LIBOR rate, our credit facility

with Citizens Bank, N.A. provides for a successor rate, based on the Secured Overnight Financing Rate. As such, while we do not
expect that we will have to renegotiate our credit facility, we do not know whether it could result in increased interest costs. In the
absence of a favorable LIBOR or successor rate, our borrowings bear interest based on the Federal Funds rate. At January 29, 2022,
there were no outstanding borrowings under our credit facility, however, we cannot provide assurance that future interest rate charges
will not have a material negative impact on our business, financial position, or operating results.

Our success depends significantly on our key personnel and our ability to attract and retain additional personnel.

Our future success is dependent on the personal efforts, performance and abilities of our key management, which includes our
executive officers as well as members of our senior management. The loss of any of our senior management may result in a loss of
organizational focus, poor operating execution, an inability to identify and execute strategic initiatives, an impairment in our ability to
identify new store locations, and an inability to consummate possible acquisitions. The competition is intense for the type of highly
skilled individuals with relevant industry experience that we require and we may not be able to continue to attract and retain new
employees of the caliber needed to achieve our objectives.

Labor shortages or increases in labor costs due to new regulations could harm our business.

Due to the COVID-19 pandemic, during fiscal 2021 we continued to experience labor shortages primarily in our distribution facility
and in our stores. If such labor shortages continue, especially during peak-selling periods, it may negatively impact our ability to
process inventory in a timely manner and effectively staff our stores. Because of the tight labor market, during fiscal 2021, we
increased our starting hourly rate to attract candidates. If we are unable to pass on these higher costs through price increases or
reduced workforce hours, our margins and profitability may be adversely impacted which could have a material adverse effect on our
business, results of operations or financial condition.

We expect that the costs associated with ocean, rail and road transportation will continue to be higher than pre-pandemic levels and
may increase further in fiscal 2022 as a result of continuing supply chain challenges and a tight labor market.

Fluctuations in the price, availability and quality of raw materials and finished goods could increase costs.

Due to the COVID-19 pandemic and the ban of Xinjiang cotton, we are seeing cost increases in labor and across raw materials. We
have secured raw materials in key item programs to reduce the impact on our gross margin. Fluctuations in the price, availability and
quality of fabrics or other raw materials used in the manufacturing of our merchandise could have a material adverse effect on our
gross margin or on our ability to meet our customers’ demands. The prices for fabrics depend on demand and market prices for the
raw materials used to produce them. To the extent that we cannot offset these cost increases with other cost reductions or efficiencies,
such higher costs will need to be passed on to our customers. Such increased costs could lead to reduced customer demand, which
could have a material adverse effect on our results of operations and cash flow.

Failure to comply with laws, rules and regulations could negatively affect our business operations and financial performance.

Our business is subject to federal, state, and increasing local rules and regulations, such as state and local wage and hour laws, the
U.S. Foreign Corrupt Practices Act, the Employee Retirement Income Security Act (“ERISA”), securities laws, import and export
laws (including customs regulations), privacy and information security regulations, unclaimed property laws, and many others. The
effect of some of these laws and regulations may be to increase the cost of doing business and may have a material impact on our
earnings. In addition, the complexity of the regulatory environment in which we operate and the related cost of compliance are both
increasing due to legal and regulatory requirements and increased enforcement. We may also be subject to investigations or audits by
governmental authorities and regulatory agencies, which can occur in the ordinary course of business or which can result from
increased scrutiny from a particular agency towards an industry, country or practice. If we fail to comply with laws, rules and
regulations or the manner in which they are interpreted or applied, we may be subject to government enforcement action, class action
litigation or other litigation, damage to our reputation, civil and criminal liability, damages, fines and penalties, and increased cost of
regulatory compliance, any of which could adversely affect our results of operations and financial performance.

Risks Related to Our Corporate Structure and Stock

Our stock price has been and will likely continue to be volatile and fluctuate substantially.

The market price of our common stock has been and will likely continue to fluctuate substantially as a result of many factors, some of
which are beyond our control. For example, from September 8, 2021, when we relisted on the Nasdaq Global market through January

29, 2022, the reported price of our common stock has ranged from a low of $4.20 on January 28, 2022, to a high of $8.99 on
November 17, 2021. Factors that could cause fluctuations in the market price of our common stock include the following:



the ongoing effect of the COVID pandemic and its variants on the retail industry and overall economy;

overall changes in the economy and general market volatility, including the effects of inflation;

news announcements regarding our quarterly or annual results of operations;

quarterly comparable sales;

acquisitions;

competitive developments;

governmental regulation (such as increased wage and paid benefits laws);

litigation affecting us; or

 market views as to the prospects of the retail clothing industry generally.

Our certificate of incorporation, as amended, limits transfers of our common stock and may, along with state law, inhibit potential
acquisition bids that could be beneficial to our stockholders.

Our certificate of incorporation, as amended, contains provisions that restrict any person or entity from attempting to purchase our
stock, without prior permission from the Board of Directors, to the extent that such transfer would (i) create or result in an individual
or entity becoming a five-percent stockholder of our stock, or (ii) increase the stock ownership percentage of any existing five-percent
stockholder. These provisions provide that any transfer that violates such provisions shall be null and void and would require the
purported transferee, upon demand by us, to transfer the shares that exceed the five percent limit to an agent designated by us for the
purpose of conducting a sale of such excess shares. These provisions would make the acquisition of our Company more expensive to
the acquirer and could significantly delay, discourage, or prevent third parties from acquiring our Company without the approval of
our Board of Directors.

In addition, we are subject to certain provisions of Delaware law, which could also delay or make more difficult a merger, tender offer
or proxy contest involving us. In particular, Section 203 of the Delaware General Corporation Law prohibits a Delaware corporation
from engaging in certain business combinations with any interested stockholder for a period of three years unless specific conditions
are met. In addition, certain provisions of Delaware law could have the effect of delaying, deferring or preventing a change in control
of us, including, without limitation, discouraging a proxy contest or making more difficult the acquisition of a substantial block of our
common stock. The provisions could also limit the price that investors might be willing to pay in the future for shares of our common
stock.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate offices and retail distribution center are located at 555 Turnpike Street in Canton, Massachusetts. The property consists
of a 755,992 gross square foot building located on approximately 27.3 acres. We owned the property until January 30, 2006, at which
time we entered into a sale-leaseback transaction, whereby we entered into a twenty-year lease agreement for an initial annual rent
payment of $4.6 million, with periodic increases every fifth anniversary of the lease.

As of January 29, 2022, we operated 220 Destination XL retail stores, 16 Destination XL outlet stores, 35 Casual Male XL retail
stores and 19 Casual Male XL outlet stores. We lease all of these stores directly from owners of several different types of centers,
including life-style centers, shopping centers, freestanding buildings, outlet centers and downtown locations. The store leases are
generally 5 to 10 years in length and contain renewal options extending their terms by between 5 and 10 years. Following this
discussion is a listing by state of all store locations open at January 29, 2022.

Sites for new stores are selected based on several factors, including the demographic profile of the area in which the site is located, the
types of stores and other retailers in the area, the location of the store within the center and the attractiveness of the store layout. We
also utilize financial models to project the profitability of each location using assumptions such as the center’s sales per square foot
averages, estimated occupancy costs and return on investment requirements.

Store count by state at January 29, 2022

DXL retail and
outlet stores

Casual Male XL
retail and outlet
stores

2
6
—
25
3
3
2
10
4
1
11
6
2
2
3
3
2
6
5
13
2
—
5
1
2
3
3
8
1
17
4
—
10
2
2
11
1
4
1
7
24
1
1
6
5
—
5

1
—
1
4
—
—
—
6
2
—
2
3
1
—
—
1
—
2
2
1
1
2
2
—
—
—
—
5
—
1
2
1
1
—
1
6
—
—
—
—
3
—
—
2
—
1
—

—

United States
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin

International

Toronto, Canada

Item 3. Legal Proceedings

From time to time, we are subject to various legal proceedings and claims that arise in the ordinary course of business. Management
believes that the resolution of these matters will not have a material adverse impact on our future results of operations or financial
position.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

PART II.

Market Information

Our common stock is listed for trading on the Nasdaq Global Market under the symbol “DXLG”.

Holders

As of March 15, 2022, based upon data provided by the transfer agent for our common stock, there were approximately 78 holders of
record of our common stock. The number of holders does not include individuals or entities who beneficially own shares but whose
shares are held of record by a broker or clearing agent.

Issuer Purchases of Equity Securities

There were no stock repurchases during fiscal 2021.

Stock Performance Graph

The following Performance Graph compares our cumulative stockholder return with a broad market index (Standard & Poor’s 500)
and one published industry index (Dow Jones U.S. Apparel Retailers) for each of the most recent five years ended January 31. The
cumulative stockholder return for shares of our common stock (“DXLG”) and each of the indices is calculated assuming that $100 was
invested on January 31, 2017. We paid no cash dividends during the periods shown. The performance of the indices is shown on a
total return (dividends reinvested) basis. The graph lines merely connect January 31 of each year and do not reflect fluctuations
between those dates. In addition, we have included a chart of the annual percentage return of our common stock, the S&P 500 and the
Dow Jones U.S. Apparel Retailers.

Annual Return Percentage

Company/Index
DXLG
S&P 500
Dow Jones U.S. Apparel Retailers

Indexed Returns

Company/Index
DXLG
S&P 500
Dow Jones U.S. Apparel Retailers

Jan 18

Jan 19

(21.8%)
20.4%
9.4%

(2.3%)
(2.0%)
8.4%

Year ended
Jan 20

(56.0%)
19.2%
10.8%

Jan 21

Jan 22

(27.9%)
15.2%
6.2%

441.3%
19.3%
8.1%

Base Period
Jan 17

Jan 18

Jan 19

Jan 20

Jan 21

Jan 22

$
$
$

100 $
100 $
100 $

78.18 $
120.37 $
109.41 $

76.36 $
117.95 $
118.60 $

33.64 $
140.56 $
131.47 $

24.24 $
161.86 $
139.65 $

131.21
193.13
150.90

The performance graph above shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or otherwise subject to the liability of that section. This graph will not be deemed incorporated by
reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date
hereof, regardless of any general incorporation language in such filing.

Item 6.

Reserved.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD LOOKING STATEMENTS

As noted above in Part 1, this Annual Report, including, without limitation, this Item 7, contains “forward-looking statements,”
including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results or
developments could differ materially from those projected in such statements because of numerous factors, including, without
limitation those risks and uncertainties set forth in Item 1A, Risk Factors, which you are encouraged to read. These forward-looking
statements generally relate to plans and objectives for future operations and are based upon management’s reasonable estimates of
future results or trends. Such statements include the potential impact on results in fiscal 2022 as it relates to the ongoing global supply
chain disruptions, the geopolitical instability from Russia's invasion of Ukraine, the increase in freight costs, the increase in certain
raw materials and labor shortages as well as overall changes in consumer spending and demand due to the continued risk of new
variants and inflation. The following discussion and analysis of our financial condition and results of operations should be read in
light of those risks and uncertainties and in conjunction with our accompanying Consolidated Financial Statements and Notes thereto.

All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified
in their entirety by the foregoing. These forward-looking statements speak only as of the date of the document in which they are made.
We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change
in our expectations or any change in events, conditions or circumstances in which the forward-looking statement is based.

Certain figures discussed below may not foot due to rounding.

Segment Reporting

We have three principal operating segments: our stores, direct business and our wholesale business. We consider our stores and direct
business segments to be similar in terms of economic characteristics, production processes and operations, and have therefore
aggregated them into one reportable segment, retail segment, consistent with our omni-channel business approach. Due to the
immateriality of the wholesale segment’s revenues, profits and assets, its operating results have been aggregated with the retail
segment for all periods.

COVID-19 Impact on our Business in Fiscal 2021

Comparable Sales and E-Commerce (Direct) Sales Definition

Our customer’s shopping experience continues to evolve across multiple channels and we are continually adapting to meet the guest’s
needs. The majority of our stores have the capability of fulfilling online orders if merchandise is not available in the warehouse. As a
result, we continue to see more transactions that begin online but are ultimately completed at the store level. Similarly, if a customer
visits a store and the item is out of stock, the associate can order the item through our website. A customer also has the ability to order
online and pick-up in a store or at curbside. We define store sales as sales that originate and are fulfilled directly at the store level. E-
commerce sales, which we also refer to as direct sales, are defined as sales that originate online, whether through our website, at the
store level or through a third-party marketplace.

Stores that have been open for 13 months are included in comparable sales. Stores that have been remodeled or re-located during the
period are also included in our determination of comparable stores sales. Stores that have been expanded by more than 25% are
considered non-comparable for the first 13 months. If a store becomes a clearance center, it is also removed from the calculation of
comparable sales. The method of calculating comparable sales varies across the retail industry and, as a result, our calculation of
comparable sales is not necessarily comparable to similarly titled measures reported by other retailers.

The Company has not carved-out prior year sales for periods where the stores were temporarily closed in fiscal 2020 due to the
pandemic. However, because the Company’s store in Canada was closed by government edict for a significant portion of fiscal 2021,
we have removed it from the current calculation of comparable sales.

Non-GAAP Measures

We monitor certain non-GAAP financial measures on a regular basis in order to track the progress of our business. These measures
include free cash flow, EBITDA, adjusted EBITDA and adjusted EBITDA margin. We believe these measures provide helpful
information with respect to the Company’s operating performance and that the inclusion of these non-GAAP measures is important to
assist investors in comparing our performance in fiscal 2021 to fiscal 2020 and fiscal 2019. We also provide certain forward-looking
information with respect to certain of these non-GAAP financial measures. However, these measures may not be comparable to

similar measures used by other companies and should not be considered superior to or as a substitute for net income (loss), net income
(loss) per diluted share or cash flow from operating activities in accordance with GAAP. See “Non-GAAP Reconciliations” below for
additional information on these non-GAAP financial measures and reconciliations to comparable GAAP measures.

RESULTS OF OPERATIONS

Our fiscal year is a 52- or 53-week period ending on the Saturday closest to January 31. Fiscal 2021, fiscal 2020 and fiscal 2019 were
all 52-week periods.

The following review of our results for fiscal 2021 includes certain comparisons against fiscal 2019 in addition to fiscal 2020. Due to
the COVID-19 pandemic and its impact on our results, particularly during fiscal 2020, we believe that the additional discussion
against fiscal 2019 provides a more meaningful comparison of our business results in fiscal 2021. Our Annual Report on Form 10-K
for the year ended January 30, 2021 (fiscal 2020) includes a discussion and analysis of our financial condition and results of
operations comparing fiscal 2020 to fiscal 2019 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.”

EXECUTIVE OVERVIEW

Sales
Net income (loss)
Adjusted EBITDA (Non-GAAP)

As a percentage of sales:
Gross margin
SG&A expenses
Operating margin
Adjusted EBITDA margin (Non-GAAP)

Per diluted share:
Net income (loss)

Liquidity:
Cash flow from operating activities
Free cash flow (Non-GAAP)

Fiscal 2021
Fiscal 2019
Fiscal 2020
(in millions, except for percentage of sales and per share
data)

$
$
$

$
$

505.0
56.7
76.9

49.5%
34.2%
12.3%
15.2%

0.83

75.5
70.3

$
$
$

$
$

318.9
(64.5)
(24.2)

32.9%
40.5%
(19.0%)
(7.6%)

(1.26)

(1.2)
(5.5)

$
$
$

$
$

474.0
(7.8)
23.5

43.1%
38.1%
(0.9%)
5.0%

(0.16)

15.8
2.4

For the first time in the Company's history, we exceeded $500.0 million in sales, with growth across all retail channels during fiscal
2021. As compared to fiscal 2019, our comparable sales increased 14.2% driven by a comparable sales increase in the direct business
of 44.0% and an increase in stores of 4.8%. This growth was the result of new customer acquisition, which was up 27% over fiscal
2019, as well as increases in conversion rate and dollars per transaction. We achieved this top-line growth while maintaining a low
promotional posture, resulting in a 300 basis point improvement in merchandise margins as compared to fiscal 2019. As a result of
this margin improvement, coupled with our restructured lease portfolio and lower operating cost base, we reported net income for
fiscal 2021 of $56.7 million, or $0.83 per diluted share, and adjusted EBITDA of $76.9 million.

We ended fiscal 2021 in a substantially stronger liquidity position than a year ago. As a result of our earnings, we generated $75.5
million in cash flows from operations during fiscal 2021, resulting in $70.3 million of free cash flow, which we used to retire our long-
term debt, pay off our revolver and renegotiate our credit facility on more favorable terms. At January 29, 2022, we are debt-free and
have cash on hand of $15.5 million and excess availability under our credit facility of $68.9 million.

Our primary objective for fiscal 2022 is to build off the many successes we had in fiscal 2021 by continuing to drive new customer
acquisition and lifetime value through greater retention and new channels of distribution. We are excited about the growth we saw
this year and believe that we gained market share during this fiscal year. However, we also recognize that our business benefited this
year from many macro-level tailwinds as well, including emergence from the pandemic restrictions, pent-up demand, and fiscal
stimulus policy which we do not expect to deliver the same sales lift in fiscal 2022. We are also cautious of the ongoing global issues
that may impact us through fiscal 2022, including the Russian invasion of Ukraine, supply chain disruptions, increased freight costs,
increased cost of raw materials, labor shortages and overall changes in consumer sentiment.

As discussed more fully below under “Liquidity and Capital Resources” subsequent to the end of fiscal 2021, our Board of Directors
approved a stock repurchase plan, pursuant to which we can purchase up to $15.0 million of our outstanding common stock through
March 15, 2023.

SALES

For fiscal 2021, total sales increased 58.3% to $505.0 million from $318.9 million for fiscal 2020 and increased 6.5% from $474.0
million in fiscal 2019.

As compared to fiscal 2020, comparable sales increased 68.5%, with stores up 98.1% and the direct business up 25.4%. The
comparable sales increase from our stores is largely due to the fact that our stores in fiscal 2020 were closed for a period of time due to
the pandemic and many operated with reduced hours after reopening. In fiscal 2021, our customers returned to in-person shopping
and our stores out-performed our expectations. Despite the surge of customers returning to stores, our direct business continued to
grow in fiscal 2021, primarily driven by increased sales from our dxl.com website and mobile app. We also saw continued sales
growth through our third-party marketplace presence, which is attracting a new customer to DXL.

As compared to fiscal 2019, comparable sales increased 14.2%, primarily due to a comparable sales increase in the direct business of
44.0% and an increase in stores of 4.8%. The growth in our direct business is due largely to our website and the growth from our
mobile app. While store traffic remained soft during fiscal 2021, we saw strong increases in conversion rates and dollars per
transaction as compared to fiscal 2019. The majority of our stores improved their performance as compared to fiscal 2019, but our
Southeast, Midwest and South Central stores generally outperformed the other regions of the country. We attribute this trend to the
fact that some areas of the country lifted mandates earlier than others and customer comfort level regarding in-store shopping differed
throughout the country.

For fiscal 2021, wholesale revenues were $5.4 million as compared to $16.6 million in fiscal 2020 and $12.5 million in fiscal 2019.
While a significant portion of our wholesale revenues in fiscal 2020 were due to the sale of masks, our wholesale business was driven
primarily by our relationship with Amazon. Based on several factors, including low margins, volatility in the global supply chain,
increasing lead times and the shifting dynamics of the business, the Company and Amazon have agreed to end the wholesale
relationship.

GROSS MARGIN

The gross margin rate for fiscal 2021, inclusive of occupancy costs, was 49.5% compared to 32.9% in or fiscal 2020 and 43.1% for
fiscal 2019.

As compared to fiscal 2020, our gross margin rate improved by 1660 basis points, driven by an increase in merchandise margin of 860
basis points and an improvement in occupancy of 800 basis points due to the leveraging of sales. On a dollar basis, occupancy costs
decreased $4.2 million, or 6.7% as a result of our lease renegotiations as well as closed stores.

As compared to fiscal 2019, our gross margin rate for the year improved by 640 basis points, driven by a 300 basis point improvement
in merchandise margins and a 340 basis point improvement in occupancy costs. As a result of our lease renegotiations as well as
closed stores, on a dollar basis, occupancy costs for fiscal 2021 decreased by $12.5 million, or 17.7%, as compared to fiscal 2019.

The improvement in merchandise margin in fiscal year 2021 was primarily driven by our low promotional strategy and low clearance
levels. Partially offsetting the savings from the reduction in markdowns was the continuing increase in the cost of freight due to
shortages of vessels for overseas product, port congestion, and labor shortages of truck drivers. We estimate that the supply chain
disruptions negatively impacted gross margin by approximately 84 basis points and we expect that we will continue to experience cost
increases related to these supply chain issues as well as due to the increase in the cost of certain raw materials, particularly cotton, well
into fiscal 2022. In aggregate, we expect that gross margin for fiscal 2022 may be impacted by upwards of 200 basis points after
factoring in freight, markdowns, and the increased cost of certain raw materials.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

SG&A expenses as a percentage of sales were 34.2% for fiscal 2021, as compared to 40.5% in fiscal 2020 and 38.1% in fiscal 2019.

On a dollar basis, compared to fiscal 2020, SG&A expenses increased by $43.9 million primarily driven by an increase in variable
costs as a result of our sales growth, including increases in store payroll and payroll-related costs, performance incentives and
advertising. However, our costs as a percentage of sales significantly improved as a result of the cost-savings initiatives implemented
in fiscal 2020.

On a dollar basis, compared to fiscal 2019, SG&A expenses for fiscal 2021 decreased $7.7 million. The decrease in SG&A expenses
for the year was primarily due to the cost-savings initiatives implemented in fiscal 2020 and reductions in payroll and payroll-related
costs. These costs were partially offset by an increase in incentive performance-based accruals and the reinstatement of our 401(k)
profit sharing contribution.

Management views SG&A expenses through two primary cost centers: Customer Facing Costs and Corporate Support Costs.
Customer Facing Costs, which include store payroll, marketing and other store operating costs, represented 19.1% of sales for fiscal
2021, compared to 20.2% of sales for fiscal 2020 and 22.6% of sales for fiscal 2019. Corporate Support Costs, which include the

distribution center and corporate overhead costs, represented 15.1% of sales, compared to 20.3% of sales for fiscal 2020 and 15.5% of
sales for fiscal 2019.

IMPAIRMENT OF ASSETS

Asset impairment charges primarily represent the write-down of operating lease right-of-use assets, where the carrying value exceeds
fair value, and the write-down of store property and equipment. In addition, any subsequent gains recognized in connection with a
store closure related to a previously recorded operating lease right-of-use asset impairment will be included as an offset to impairment
charges, with the remainder of the gain included as a reduction in store occupancy costs.

For fiscal 2021, the Company recorded a non-cash gain of $2.7 million on the reduction of its operating lease liability in connection
with its decision to close certain retail stores, which resulted in a revaluation of the lease liability. Of the total non-cash gain, $2.3
million related to leases where the right-of-use assets had previously been impaired, and therefore, the gain was recorded as a
reduction of the previously-recorded impairment. The remaining gain $0.4 million was recorded as a reduction to occupancy costs.

For fiscal 2020, the asset impairment charge was $14.8 million, which included $13.3 for the write-down of operating lease right-of-
use assets and $4.1 million for the write-down of store assets, partially offset by a non-cash gain of $2.6 million. The asset
impairment charge for fiscal 2019 was $0.9 million, which included $0.7 million for the write-down of right-of-use assets and $0.2
million for the write-down of store assets.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization expense was $17.2 million, as compared to $21.5 million in fiscal 2020 and $24.6 million for fiscal
2019. Our depreciation expense has been decreasing over the past few years, due to our reduced capital expenditures.

INTEREST EXPENSE, NET

Net interest expense for fiscal 2021 was $4.4 million, as compared to $3.9 million for fiscal 2020 and $3.3 million for fiscal 2019.
The interest expense for fiscal 2021 includes a prepayment penalty of $1.1 million in connection with the Company's early
prepayment of its $17.5 million FILO loan as well as $0.9 million for the write-off unamortized debt issuance costs associated with
both the FILO loan and our prior credit facility. These costs were partially offset by a decrease in interest expense due to reduced
borrowing levels in fiscal 2021 as compared to fiscal 2020 and fiscal 2019.

INCOME TAXES

Realization of our deferred tax assets, which relate principally to federal net operating loss carryforwards, of which approximately
$100.7 million will expire from fiscal 2028 through fiscal 2037, is dependent on generating sufficient taxable income. In addition,
there are $43.1 million of federal net operating loss carryforwards that do not expire.

At the end of fiscal 2013, we entered a three-year cumulative loss and based on all positive and negative evidence at February 1, 2014,
we established a full valuation allowance against our net deferred tax assets. Although we returned to profitability in fiscal 2021, we
believe that a full valuation allowance remains appropriate at this time. Our conclusion is based on the fact that we remain in a three-
year cumulative loss position, which is considered significant negative evidence. Once we transition to a three-year cumulative profit
position and demonstrate more consistent and prolonged profitability, we will reevaluate the valuation allowance.

Our tax provision for fiscal 2021 was primarily due to income tax in states where NOL usage is statutorily limited. Our tax provision
for fiscal 2020 was primarily due to state margin tax, based on gross receipts less certain deductions. See Note F of the Notes to the
Consolidated Financial Statements.

NET INCOME (LOSS )

Net income for fiscal 2021 was $56.7 million, or $0.83 per diluted share, as compared to a net loss of $(64.5) million, or $(1.26) per
diluted share, in fiscal 2020 and a net loss of $(7.8) million, or $(0.16) per diluted share, in fiscal 2019. The improvement in earnings
for fiscal 2021 was due to an increase in our comparable sales as compared to both fiscal 2020 and fiscal 2019, an improvement in
gross margin driven by lower markdowns and restructured lease portfolio, and a reduction in operating costs, as a percentage of sales,
as a result of our cost-savings initiatives implemented in fiscal 2020. In addition, our significant net operating loss carryforwards
minimized our cash tax payments.

Included in our results for fiscal 2021 was a gain of $2.3 million against previously recognized impairment charges. Results for fiscal
2020 and fiscal 2019 included asset impairment charges of $14.8 million and $0.9 million, respectively. Fiscal 2019 also included
charges of $1.7 million for exit costs associated with our London operations and $0.7 million in CEO transition costs.

SEASONALITY

A comparison of sales in each quarter of the past three fiscal years is presented below. The sales results for fiscal 2020 reflect the
impact that the COVID-19 pandemic had on the Company’s business, especially in the first and second quarters when we temporarily
closed all of our stores in response to the pandemic. The amounts shown are also not necessarily indicative of actual trends, because
such amounts also reflect the addition of new stores and the remodeling and closing of other stores during these periods. Consistent
with the retail apparel industry, our business is seasonal. (Certain columns may not foot due to rounding)

(in millions, except percentages)
First quarter
Second quarter
Third quarter
Fourth quarter

EFFECTS OF INFLATION

Fiscal 2021
111.5
138.6
121.5
133.5
505.0

22.1% $
27.4%
24.1%
26.4%
100.0% $

Fiscal 2020
57.2
76.4
85.2
100.1
318.9

17.9% $
24.0%
26.7%
31.4%
100.0% $

Fiscal 2019
113.0
123.2
106.6
131.2
474.0

23.8%
26.0%
22.1%
27.7%
100.0%

During fiscal 2021, we began to be impacted by the effects of the inflationary pressures on freight, raw materials, and labor. We have
taken selective price increases on our merchandise assortment to mitigate the pressure on gross margin. If such inflationary pressures
increase, the effects may have an increased impact on our financial results in fiscal 2022.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash generated from operations and availability under our credit facility, which is discussed
below. We took several actions during fiscal 2020 to preserve our liquidity, and in the first quarter of fiscal 2021, we further
strengthened our liquidity position by completing a direct offering of our common stock, which raised $4.4 million, net of offering
costs. Also in the first quarter of fiscal 2021, we refinanced our then existing $15.0 million FILO loan by entering into a new $17.5
million FILO loan, which increased our borrowing capacity. As a result of our improved earnings and free cash flow, in the third
quarter of fiscal 2021, we used a portion of the excess cash flow to prepay the FILO loan, which bore an interest rate of 8.50%. At
January 29, 2022, we had no outstanding debt, including no borrowings under our credit facility.

At January 29, 2022, our material contractual obligations primarily consisted of our operating lease obligations, as disclosed in Note
E, Leases, to the Notes to the Consolidated Financial Statements. In addition to our lease obligations, at January 29, 2022, we were
also contractually committed pursuant to a merchandise purchase obligation to meet minimum purchases of $10.0 million in each
fiscal year through fiscal 2023.

We believe our cash on hand, availability under our credit facility, and ongoing cash generated from our operations will be sufficient
to fund our working capital requirements, commitments, capital expenditures and, as discussed further below, our stock repurchase
program which was announced in March 2022. However, we remain cautious regarding the effect that the pandemic could have on
consumer sentiment and the geopolitical impact of Russia's invasion of Ukraine on our business and the global economy.

The following table sets forth financial data regarding our liquidity position at the end of the past three fiscal years:

(in millions)
Cash flow from operating activities
Capital expenditures
Free Cash Flow (Non-GAAP)

Cash on hand, at year end
Total debt, net of unamortized debt issuance costs
Unused excess availability under Credit Facility

Fiscal 2021

Fiscal 2020

Fiscal 2019

$
$
$

75.5
(5.3)
70.3

15.5
-
68.9

$
$
$

(1.2) $
(4.2)
(5.5) $

19.0
74.4
11.5

$
$
$

15.8
(13.4)
2.4

4.3
54.1
48.5

Credit Facility

On October 28, 2021, we entered into a new $125.0 million revolving credit agreement, which replaced our prior credit facility that
was due to expire in May 2023 (the "New Credit Facility"). The New Credit Facility has a five-year term and provides more favorable
terms than the previous credit facility. The New Credit Facility includes a sublimit of $20.0 million for commercial and standby
letters of credit and a sublimit of up to $15.0 million for swingline loans. Borrowings made pursuant to the New Credit Facility will be
made pursuant to either a Base Rate loan or LIBOR Rate loan, at the Company's option. Base Rate loans will bear interest, at a rate
equal to (i) the greater of: (a) the Prime Rate, (b) the Federal Funds effective rate plus 0.50% per annum and (c) the daily LIBOR rate
plus 1.00% per annum, plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25% or 0.50%.
LIBOR Rate loans, which may be either for 1 month or 3 months, will bear interest at (i) the LIBOR rate, or the Benchmark Rate as
defined in the credit agreement plus (ii) a varying percentage based on the Company’s average excess availability, of either 1.25% or
1.50%.

We had no outstanding borrowings under the New Credit Facility at January 29, 2022. At January 29, 2022, outstanding standby
letters of credit were $2.7 million and outstanding documentary letters of credit of $1.4 million. The average monthly borrowing
outstanding under the credit facilities during fiscal 2021 was approximately $16.4 million, resulting in an average unused excess
availability of approximately $56.2 million. Unused excess availability at January 29, 2022 was $68.9 million. Our obligations under
the New Credit Facility are secured by a lien on substantially all of our assets.

Our New Credit Facility is described in more detail in Note D to the Notes to the Consolidated Financial Statements.

FILO Loan

In March 2021, we refinanced our existing $15.0 million FILO loan (the “existing FILO loan”) and entered into a new $17.5 million
FILO loan (the “new FILO loan”). The new FILO loan had higher advance rates, provided additional borrowing capacity of
approximately $5.0 to $10.0 million, and carried an interest rate of 8.50%. The terms of the new FILO loan included a prepayment
penalty, if any portion of the principal for the new FILO Loan was prepaid during the initial two-year period, equal to the greater of (i)
the incremental interest that would have been incurred with respect to that principal repayment during the two year period and (ii) 3%
of the principal prepayment, unless the prepayment occurs after March 16, 2022 in connection with the Company’s renegotiation of its
Credit Agreement in which case the prepayment premium would be equal to 1% of the principal prepayment.

On September 3, 2021, we prepaid the outstanding balance of $17.5 million under the new FILO loan. In connection with the
prepayment, we negotiated a reduced prepayment penalty of $1.1 million and wrote-off unamortized debt issuance costs of $0.9
million. At January 29, 2022, the Company has no outstanding long-term debt.

Stock Repurchase Program

Subsequent to the end of fiscal 2022, our Board of Directors approved a stock repurchase plan. Under the stock repurchase plan, we
may purchase up to $15.0 million of our common stock through open market and privately negotiated transactions during fiscal 2022.
The timing and the amount of any repurchases of common stock will be determined based on the Company’s evaluation of market
conditions and other factors. The stock repurchase program is expected to commence in the first quarter of fiscal 2022 and will expire
on March 15, 2023 but may be suspended, terminated or modified at any time for any reason. We expect to finance the repurchases
from operating funds and/or periodic borrowings on our credit facility. Any repurchased common stock will be held as treasury stock.

INVENTORY

At January 29, 2022, total inventories decreased to $81.8 million from $85.0 million at January 30, 2021 and $102.4 million at
February 1, 2020. Maintaining sufficient inventory levels, given the ongoing supply chain disruptions, remains a primary focus. We
believe that we have secured sufficient inventory to support our current sales forecast. We are continuing to manage our inventory
conservatively, narrowing our assortments and increasing exclusivity with our national brands. As a result, we were able to increase
our inventory turnover to over 2.0 times as compared to historical turnover of approximately 1.5 times. At January 29, 2022, our
clearance inventory was 6.0% of our inventory as compared to 10.4% at January 30, 2021 and 10.0% at February 1, 2020.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements as defined by 303(a)(4) of Regulation S-K.

CAPITAL EXPENDITURES

The following table sets forth the open stores and related square footage at January 29, 2022 and January 30, 2021 respectively:

Store Concept
(square footage in thousands)
DXL Retail
DXL Outlet
Casual Male XL Retail
Casual Male XL Outlet
Total Stores

At January 29, 2022

At January 30, 2021

Number of
Stores

Square
Footage

Number of
Stores

Square
Footage

220
16
35
19
290

1,678
80
115
57
1,930

226
17
46
22
311

1,718
82
152
66
2,018

We did not rebrand any of our Casual Male XL stores or open any new DXL locations during fiscal 2021. In total, we closed 21
stores during the year. Below is a summary of those store closings from January 30, 2021 to January 29, 2022:

Number of Stores:
At January 30, 2021

Closed retail stores

At January 29, 2022

DXL Retail

DXL Outlet

Casual Male
XL Retail

Casual Male
XL Outlet

226
(6)
220

17
(1)
16

46
(11)
35

22
(3)
19

Total Stores
311
(21)
290

Our capital expenditures for fiscal 2021 were $5.3 million, as compared to $4.2 million in fiscal 2020. The capital expenditures for
fiscal 2021 primarily related to management information projects to support our distribution center, marketing, stores and website.

In response to the pandemic, capital expenditures for the past two years have been limited. For fiscal 2022, our capital expenditures
are expected to be approximately $10.0-$12.0 million. In addition to technology investments related to our marketing and
merchandising initiatives, we are also actively reviewing opportunities to relocate or convert Casual Male XL stores to DXL and we
are reviewing white space opportunities in markets where our store footprint is underpenetrated. We believe that our store portfolio is
a vital asset to our business strategy and we expect to continue to invest in stores over the next several years as we further strengthen
the store portfolio. Over the next three to five years, based on our preliminary store development plan, we believe that we could
potentially open up to 50 new and relocated stores.

Non-GAAP Reconciliations

We monitor certain non-GAAP financial measures on a regular basis in order to track the progress of our business, including the
measures below. We believe these measures provide helpful information with respect to the Company’s operating performance to
shareholders, investors and analysts, and that the inclusion of these non-GAAP measures is important to assist investors in comparing
our performance in fiscal 2021 to fiscal 2020 and fiscal 2019, on a comparable basis. However, these measures may not be
comparable to similar measures used by other companies and should not be considered superior to or as a substitute for operating net
income (loss), net income (loss) per diluted share or cash flows from operating activities in accordance with GAAP. (Certain amounts
in the following tables may not foot due to rounding.)

Free Cash Flow

We calculate free cash flow as cash flow provided by operating activities less capital expenditures. Free cash flow excludes the
mandatory and discretionary repayment of debt. The following table provides a reconciliation of free cash flow:

(in millions)
Cash flow from operating activities (GAAP)
Capital expenditures

Free cash flow (non-GAAP)

Fiscal 2021

Fiscal 2020

Fiscal 2019

75.5
(5.3)
70.3

(1.2) $
(4.2)
(5.5) $

15.8
(13.4)
2.4

EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin

EBITDA, Adjusted EBITDA, EBITDA margin and adjusted EBITDA margin are presented because we believe that these measures
are useful to investors in evaluating our performance. Management uses EBITDA as a key metric to measure profitability and
economic productivity. EBITDA is calculated as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is
calculated as EBITDA before asset impairment charges, exit costs associated with London operations, CEO transition costs and
corporate restructuring. EBITDA margin and Adjusted EBITDA margin are calculated as EBITDA and Adjusted EBITDA,
respectively, divided by sales.

The following table is a reconciliation of net income (loss) on a GAAP basis to EBITDA and Adjusted EBITDA, on a non-GAAP
basis, for each fiscal year:

(in millions, except percentages)

Fiscal 2021

Fiscal 2020

Fiscal 2019

Net income (loss), on a GAAP basis
Add back:
Provision for income taxes
Interest expense
Depreciation and amortization
EBITDA, on a non-GAAP basis
Add back:
Exit costs associated with London operations
CEO transition costs
Impairment of assets
Adjusted EBITDA, on a non-GAAP basis

56.7

(64.5)

(7.8)

0.9
4.4
17.2
79.2

— $
—
(2.3)
76.9

0.1
3.9
21.5
(39.0)

—
—
14.8
(24.2)

0.1
3.3
24.6
20.2

1.7
0.7
0.9
23.5

The following table is a reconciliation of operating margin, on a GAAP basis, to EBITDA margin and Adjusted EBITDA margin, on a
non-GAAP basis, for each fiscal year:

(as a percentage of sales)

Fiscal 2021

Fiscal 2020

Fiscal 2019

Operating margin, on a GAAP basis
Add back:
Depreciation and amortization
EBITDA margin
Add back:
Exit costs associated with London operations
CEO transition costs
Impairment of assets
Adjusted EBITDA margin, on a non-GAAP basis

12.3%

3.4%
15.7%

—
—
(0.5%)
15.2%

(19.0%)

6.7%
(12.2%)

—
—
4.7%
(7.6%)

(0.9%)

5.2%
4.3%

0.4%
0.2%
0.2%
5.0%

CRITICAL ACCOUNTING POLICIES; USE OF ESTIMATES

Our financial statements are based on the application of significant accounting policies, many of which require our management to
make significant estimates and assumptions (see Note A to the Notes to the Consolidated Financial Statements). We believe that the
following items involve some of the more critical judgments in the application of accounting policies that currently affect our financial
condition and results of operations.

Long-Term Incentive Plans

Stock awards are primarily granted pursuant to our Long-Term Incentive Plans (“LTIPs”). During fiscal 2021, we had three active
LTIPs: the 2019-2021 LTIP, the 2020-2022 LTIP and the 2021-2023 LTIP. See Note H to the Notes to the Consolidated Financial
Statements for additional discussion of our LTIPs. Awards under each LTIP consist of 50% time-based awards and 50% performance-
based awards. All time-based awards are amortized over each LTIP’s respective vesting periods.

The performance-based component of each LTIP is a dollar-denominated award. Equity awards will only be granted if such
performance targets are achieved. Accordingly, each quarter the Company reviews its expected achievement against such
performance targets to assess whether an accrual is necessary. The performance metrics are for three-year performance periods and

may include metrics such as total shareholder return against peers, 3-year stacked comparable sales or Adjusted EBITDA. As such,
the accruals are based on projections that may extend beyond a year and are subject to change quarter to quarter based on actual
performance. All accruals are recorded as a liability. If performance targets are achieved and equity awards are granted, the related
cost of those awards will be reclassified from the accrual to stock-based compensation on grant date.

The performance targets under the 2019-2021 LTIP were achieved at the end of fiscal 2021. Based on that achievement, subsequent
to the end of fiscal 2021, on March 15, 2022, the Compensation Committee approved a total performance award of $2.6 million, to be
awarded in a combination of 50% cash and 50% RSUs. All awards are subject to further vesting through August 31, 2022.
Accordingly, at January 29, 2022, the Company has accrued $2.3 million of the $2.6 million award.

With respect to the performance-based component of the 2020-2022 LTIP and the 2021-2023 LTIP, which each approximate $1.9
million, at target, awards will be granted at the end of the respective performance period if the performance targets are achieved.
Through the end of fiscal 2021, we have accrued approximately $1.5 million and $0.8 million for performance under the 2020-2022
LTIP and the 2021-2023 LTIP, respectively.

Impairment of Long-Lived Assets

We evaluate property and equipment and operating lease right-of-use assets for impairment when facts and circumstances indicate that
the carrying values of such assets may not be recoverable. Our judgment regarding the identification of impairment indicators is based
on operational performance at the store level. Factors considered by us that could result in an impairment triggering event include
significant changes in the use of assets, a current period operating or cash flow loss, underperformance of a store relative to historical
or expected operating results, and an accumulation of costs significantly in excess of the amount originally expected for the
construction of the long-lived store assets. We will recognize an impairment when the undiscounted cash flow estimated to be
generated by those assets is less than the assets’ carrying amount. If actual market conditions are less favorable than management’s
projections, future write-offs may be necessary. The model for undiscounted future cash flows includes assumptions, at the individual
store level, with respect to expectations for future sales and gross margin rates as well as an estimate for occupancy costs used to
estimate the fair value of the respective store’s operating lease right-of-use asset. The amount of impairment, if any, is measured
based on projected discounted future cash flows using a discount rate reflecting the Company’s average cost of funds. Due to
uncertainty around the duration and extent of the pandemic’s impact on future cash flows, the Company’s projections in fiscal 2020
were based on multiple probability-weighted scenarios and assumed that consumer retail spending would remain substantially
curtailed for a period of time.

In addition, any subsequent gains recognized in connection with a store closure related to a previously recorded operating lease right-
of-use asset impairment will be included as an offset to impairment charges, with the remainder of the gain included as a reduction in
store occupancy costs.

For fiscal 2021, we recognized a gain against previously recorded impairment charges of $2.3 million. In fiscal 2020 and fiscal 2019,
we recorded net asset impairment charges of $14.8 million and $0.9 million, respectively.

Leases

In accordance with ASU 2016-02, “Leases (Topic 842)” our operating leases are reported as right-of-use assets with corresponding
lease liabilities on our Consolidated Balance Sheet. As discussed above, we evaluate, at the individual store level, the right-of-use
assets for impairment at least annually but also when facts and circumstances indicate that the carrying value may not be recoverable.
Furthermore as the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental
borrowing rate, based on information available at the lease measurement date to determine the present value of future payments. See
Note A to the Notes to the Consolidated Financial Statements.

RECENT ACCOUNTING PRONOUNCEMENTS

We have reviewed accounting pronouncements and interpretations thereof that have effective dates during the periods reported and in
future periods. See Note A to the Notes to the Consolidated Financial Statements included in this report for information on recent
accounting pronouncements and the impact of impending standards on our future filings.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, our financial position and results of operations are routinely subject to a variety of risks, including
market risk associated with interest rate movements on borrowings and foreign currency fluctuations. We regularly assess these risks
and have established policies and business practices to protect against the adverse effects of these and other potential exposures.

Interest Rates

We utilize cash from operations and from our Credit Facility to fund our working capital needs. Our Credit Facility is not used for
trading or speculative purposes. In addition, under our Credit Facility we have available letters of credit as sources of financing for
our working capital requirements. Borrowings under the Credit Facility, which expires October 28, 2026, bear interest at variable rates
based on the prime rate or LIBOR.

At January 29, 2022, we had no outstanding borrowings under the Credit Facility and no long-term debt. Based upon a sensitivity
analysis as of January 29, 2022, assuming average outstanding borrowings during fiscal 2021 of $16.4 million under our Credit
Facility and an average outstanding balance for the FILO loan of approximately $10.8 million, a 50 basis point increase in interest
rates would have increased interest expense by approximately $0.1 million on an annualized basis.

Foreign Currency

Our DXL store located in Toronto, Canada, which closed subsequent to the end of fiscal 2021 on February 28, 2022, conducted
business in Canadian dollars. As of January 29, 2022, sales from this store were immaterial to consolidated sales. As such, we believe
that movement in foreign currency exchange rates did not have a material adverse effect on our financial position or results of
operations.

Item 8. Financial Statements and Supplementary Data

DESTINATION XL GROUP, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (KPMG LLP, Boston, MA, Auditor Firm ID: 185)...........................

Consolidated Financial Statements:

Consolidated Balance Sheets at January 29, 2022 and January 30, 2021 ..............................................................................

Consolidated Statements of Operations for the Fiscal Years Ended January 29, 2022, January 30, 2021 and

February 1, 2020 .......................................................................................................................................................

Consolidated Statements of Comprehensive Income (Loss) for the Fiscal Years Ended January 29, 2022,

January 30, 2021 and February 1, 2020 ......................................................................................................................

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Fiscal Years Ended

January 29, 2022, January 30, 2021 and February 1, 2020 .........................................................................................

Consolidated Statements of Cash Flows for the Fiscal Years Ended January 29, 2022, January 30, 2021

and February 1, 2020 ..................................................................................................................................................

Notes to Consolidated Financial Statements ....................................................................................................................................

Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
Destination XL Group, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Destination XL Group, Inc. and subsidiaries (the Company) as of
January 29, 2022 and January 30, 2021, the related consolidated statements of operations, comprehensive income (loss), changes in
stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended January 29, 2022, and the related
notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of January 29, 2022 and January 30, 2021, and the results of its operations
and its cash flows for each of the years in the three-year period ended January 29, 2022, in conformity with U.S. generally accepted
accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of January 29, 2022, based on criteria established in Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our
report dated March 17, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial
reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining,
on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.

Impairment of long-lived store assets

As discussed in Note A to the consolidated financial statements, the Company reviews its long-lived assets, which include
property and equipment and operating lease right-of-use assets, for events or changes in circumstances that might indicate the
carrying amount of the assets may not be recoverable. The Company’s judgment regarding the identification of impairment
indicators is based on operational performance at the store level. Factors considered by the Company that could result in an
impairment triggering event include significant changes in the use of assets, a current period operating or cash flow loss,
underperformance of a store relative to historical or expected operating results, and an accumulation of costs significantly in
excess of the amount originally expected for the construction of the long-lived store assets. At January 29, 2022, the Company
had property and equipment and operating lease right-of-use assets of $44.4 million and $127.8 million, respectively.

We identified the assessment of impairment triggering events related to long-lived store assets, specifically property and
equipment and operating lease right-of-use assets, as a critical audit matter. A high degree of auditor judgment was required to
evaluate the Company’s assessment of (1) stores with current period operating or cash flow losses, and (2) underperforming
stores based on current period operating or cash flow results relative to their respective historical and expected results.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested
the operating effectiveness of certain internal controls related to the Company’s process of identifying and evaluating potential
impairment triggering events. This included a control related to the Company’s assessment of (1) stores with current period

operating or cash flow losses, and (2) underperforming stores relative to historical or expected operating results. For certain
stores, we evaluated the Company’s analysis of potential impairment triggering events by comparing actual operating and cash
flow results to historical results, expected results, and the remaining net book value of store assets. We performed sensitivity
analyses to assess the impact that reasonably possible changes to future cash flows have on the Company’s evaluation of
potential impairment triggering events. We also reviewed board of directors meeting minutes and available industry and analyst
information to assess the Company’s identification and evaluation of potential triggering events.

/s/ KPMG LLP

We have served as the Company’s auditor since 2013.

Boston, Massachusetts
March 17, 2022

DESTINATION XL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
January 29, 2022 and January 30, 2021
(In thousands, except share data)

January 29, 2022
(Fiscal 2021)

January 30, 2021
(Fiscal 2020)

ASSETS
Current assets:

Cash and cash equivalents
Accounts receivable
Inventories
Prepaid expenses and other current assets

Total current assets

Noncurrent assets:

Property and equipment, net of accumulated depreciation and amortization
Operating lease right-of-use assets
Intangible assets
Other assets

Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:

Accounts payable
Accrued expenses and other current liabilities
Operating leases, current
Borrowings under credit facility

Total current liabilities

Long-term liabilities:
Long-term debt
Operating leases, noncurrent
Other long-term liabilities

Total long-term liabilities

Commitments and contingencies

Stockholders' equity (deficit):

Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued
Common stock, $0.01 par value, 125,000,000 shares and 100,000,000 shares
authorized at January 29, 2022 and January 30, 2021 respectively, 77,025,419 and
64,656,384 shares issued at January 29, 2022 and January 30, 2021, respectively
Additional paid-in capital
Treasury stock at cost, 12,755,873 shares at January 29, 2022 and January 30, 2021,
respectively
Accumulated deficit
Accumulated other comprehensive loss
Total stockholders' equity (deficit)

Total liabilities and stockholders' equity (deficit)

15,506
2,110
81,764
6,615
105,995

44,442
127,812
1,150
559
279,958

25,165
35,102
35,191
—
95,458

—
120,414
5,867
126,281

18,997
6,416
85,028
3,689
114,130

56,552
134,321
1,150
602
306,755

27,091
24,825
43,598
59,521
155,035

14,869
135,819
5,109
155,797

—

770
319,511

(92,658)
(163,879)
(5,525)
58,219
279,958

647
314,747

(92,658)
(220,592)
(6,221)
(4,077)
306,755

The accompanying notes are an integral part of the consolidated financial statements.

DESTINATION XL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020
(In thousands, except per share data)

Sales
Cost of goods sold including occupancy costs
Gross profit

Expenses:

Selling, general and administrative
Exit costs associated with London operations
CEO transition costs
Impairment of assets
Depreciation and amortization

Total expenses

Operating income (loss)

Interest expense, net

Income (loss) before provision for income taxes

Provision for income taxes

Net income (loss)

Net income (loss) per share - basic
Net income (loss) per share - diluted

Weighted-average number of common shares outstanding:

Basic
Diluted

January 29, 2022
(Fiscal 2021)

January 30, 2021
(Fiscal 2020)

February 1, 2020
(Fiscal 2019)

505,021
255,197
249,824

318,946
214,081
104,865

474,038
269,837
204,201

172,962
—
—
(2,344)
17,226
187,844

61,980

(4,350)

57,630

917

56,713

0.89
0.83

63,401
68,031

129,062
—
—
14,841
21,477
165,380

(60,515)

(3,917)

(64,432)

106

180,663
1,737
743
889
24,563
208,595

(4,394)

(3,297)

(7,691)

105

$
$

(64,538) $

(7,796)

(1.26) $
(1.26) $

(0.16)
(0.16)

51,317
51,317

49,992
49,992

$
$

The accompanying notes are an integral part of the consolidated financial statements.

DESTINATION XL GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020
(In thousands)

Net income (loss)

Other comprehensive income (loss) before taxes:

Recognition of accumulated foreign currency translation adjustment
Foreign currency translation
Pension plan

Other comprehensive income (loss) before taxes

Tax provision related to items of other comprehensive income (loss)
Other comprehensive income (loss), net of tax
Comprehensive income (loss)

January 29, 2022
(Fiscal 2021)

January 30, 2021
(Fiscal 2020)

February 1, 2020
(Fiscal 2019)

56,713

(64,538) $

(7,796)

—
(62)
758
696
—
696
57,409

— $
(44)
254
210
—
210
(64,328) $

792
(83)
(957)
(248)
—
(248)
(8,044)

The accompanying notes are an integral part of the consolidated financial statements.

DESTINATION XL GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
For the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020
(In thousands)

Balance at February 2, 2019

62,242

622

310,393

(12,755) $

(92,658) $

(153,534) $

(6,183) $

58,640

Common Stoc
k
Shares

Amounts

Additional

Paid-in
Capital

Treasury St
ock
Shares

Accumulated
Other

Amounts

Accumulated
Deficit

Comprehensive
Income (Loss)

Total

Stock compensation expense
RSUs granted for achievement of performance-based
compensation, reclassified from liability to equity
Issuance of common stock, upon RSUs release
Shares withheld for taxes related to net share settlement of
RSUs
Deferred stock vested
Cancellations of restricted stock, net of issuances
Board of directors compensation
Change in accounting principle due to adoption of ASC
842
Accumulated other comprehensive income (loss):

Unrecognized loss associated with Pension Plan
Foreign currency
Recognition of accumulated foreign currency
translation adjustment (Note A)

Net loss
Balance at February 1, 2020

Stock compensation expense
Issuance of common stock, upon RSUs release
Deferred stock vested
Board of directors compensation
Accumulated other comprehensive income (loss):

Unrecognized gain associated with Pension Plan
Foreign currency

Net loss
Balance at January 30, 2021

Issuance of common stock through private direct offering,
net of offering costs
Stock compensation expense
Issuance of common stock, upon RSUs and PSUs release
Exercise of stock options
Shares withheld for taxes related to net share settlement
Board of directors compensation
Accumulated other comprehensive income (loss):

Unrecognized gain associated with Pension Plan
Foreign currency

Net income
Balance at January 29, 2022

977

(111)
13
(20)
196

(1)
—
—
2

1,922

304
(10)

(243)
—
—
567

5,276

(957)
(83)

792

63,297

633

312,933

(12,755) $

(92,658) $

(7,796)
(156,054) $

(6,431) $

588
114
657

6
1
7

1,446
(6)
(1)
375

1,922

304
—

(244)
—
—
569

5,276

(957)
(83)

792
(7,796)
58,423

1,446
—
—
382

64,656

647

314,747

(12,755) $

(92,658) $

(64,538)
(220,592) $

254
(44)

(6,221) $

254
(44)
(64,538)
(4,077)

11,111

111

788
522
(285)
233

8
5
(3)
2

4,264
1,229
(8)
771
(1,864)
372

77,025

770

319,511

(12,755) $

(92,658) $

56,713
(163,879) $

758
(62)

(5,525) $

4,375
1,229
—
776
(1,867)
374

758
(62)
56,713
58,219

The accompanying notes are an integral part of the consolidated financial statements.

DESTINATION XL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020
(In thousands)

Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by (used
for) operating activities:

Recognition of accumulated foreign currency translation adjustment
Amortization and write-off of deferred debt issuance costs
Impairment of assets
Depreciation and amortization
Stock compensation expense
Board of directors stock compensation

Changes in operating assets and liabilities:

Accounts receivable
Inventories
Prepaid expenses and other current assets
Other assets
Accounts payable
Operating leases, net
Accrued expenses and other liabilities

Net cash provided by (used for) operating activities

Cash flows from investing activities:

Additions to property and equipment, net

Net cash used for investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock from private direct offering,
net of offering costs
Proceeds from new FILO loan
Repayment of FILO loans
Net borrowings (repayments) under credit facility
Debt extinguishment costs
Debt issuance costs
Proceeds from the exercise of stock options
Tax withholdings paid related to net share settlements

Net cash provided by (used for) financing activities

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents:
Beginning of period
End of period

January 29, 2022
(Fiscal 2021)

January 30, 2021
(Fiscal 2020)

February 1, 2020
(Fiscal 2019)

56,713

(64,538) $

(7,796)

—
1,179
(2,344)
17,226
1,229
374

4,306
3,264
(2,926)
407
(1,926)
(14,959)
12,998
75,541

(5,272)
(5,272)

4,375
17,500
(32,500)
(59,733)
(1,111)
(1,200)
776
(1,867)
(73,760)
(3,491)

—
146
14,841
21,477
1,446
382

(197)
17,392
7,194
613
(4,672)
(2,440)
7,128
(1,228)

(4,243)
(4,243)

—
—
—
20,155
—
(25)
—
—
20,130
14,659

18,997
15,506

4,338
18,997

792
139
889
24,563
1,922
569

(1,174)
4,417
1,252
1,797
(2,655)
(4,254)
(4,658)
15,803

(13,399)
(13,399)

—
—
—
(2,690)
—
—
—
(244)
(2,934)
(530)

4,868
4,338

The accompanying notes are an integral part of the consolidated financial statements.

DESTINATION XL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 29, 2022

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Destination XL Group, Inc. (collectively with its subsidiaries referred to as the “Company”) is the largest specialty retailer in the United
States of big & tall men’s clothing and shoes. The Company operates under the trade names of Destination XL®, DXL®, DXL Men’s
Apparel, DXL Outlets®, Casual Male XL® and Casual Male XL Outlets. At January 29, 2022, the Company operated 220 DXL stores,
35 Casual Male XL stores, 19 Casual Male XL outlets and 16 DXL outlets located throughout the United States, including a store in
Canada and an e-commerce site, www.dxl.com, and a mobile app.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts,
transactions and profits are eliminated.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United
States. The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities as of
the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could
differ from estimates.

Impact of COVID-19 Pandemic on Business

On March 11, 2020, the World Health Organization declared the current outbreak of a novel coronavirus disease (“COVID-19”) as a
global pandemic. Because the pandemic had a material impact on the Company's business in fiscal 2020, results for fiscal 2021 may not
be comparable to the results for fiscal 2020.

While there were positive signs of recovery in fiscal 2021, the duration and continuing impact of the COVID-19 pandemic and its
variants on the global economy remains uncertain and could continue to have a material impact on the Company’s results of operations,
financial condition and cash flows.

Segment Reporting

The Company has three principal operating segments: its stores, direct and wholesale businesses. The Company considers its stores and
direct operating segments to be similar in terms of economic characteristics, production processes and operations, and has therefore
aggregated them into one reportable segment, retail segment, consistent with its omni-channel business approach. Due to the
immateriality of the wholesale segment’s revenues, profits and assets, its operating results are aggregated with the retail segment for all
periods.

Fiscal Year

The Company’s fiscal year is a 52-week or 53-week period ending on the Saturday closest to January 31. Fiscal 2021, fiscal 2020, and
fiscal 2019 were each 52-week periods, which ended on January 29, 2022, January 30, 2021 and February 1, 2020, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash in banks and short-term investments, which have a maturity of ninety days or less when
acquired. Included in cash equivalents are credit card and debit card receivables from banks, which generally settle within two to four
business days.

Accounts Receivable

Accounts receivable primarily includes amounts due for rebates from certain vendors and amounts due from wholesale customers. For
fiscal 2021, fiscal 2020 and fiscal 2019, the Company did not incur any losses on its accounts receivable.

Fair Value of Financial Instruments

Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments, requires disclosure of the fair value of certain financial
instruments. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses
approximate fair value because of the short maturity of these instruments.

ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and
enhances disclosures about fair value measurements.

The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained
from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following
fair value hierarchy:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets
that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full
term of the related asset or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets
or liabilities.

The Company utilizes observable market inputs (quoted market prices) when measuring fair value whenever possible.

Stores that have indicators of impairment and fail the recoverability test (based on undiscounted cash flows) are measured for impairment
by comparing the fair value of the assets against their carrying value. Fair value of the assets is estimated using a projected discounted
cash flow analysis and is classified within Level 3 of the valuation hierarchy. See Impairment of Long-Lived Assets below.

Inventories

All inventories are valued at the lower of cost or market, using a weighted-average cost method.

Property and Equipment

Property and equipment are stated at cost. Major additions and improvements are capitalized while repairs and maintenance are charged
to expense as incurred. Upon retirement or other disposition, the cost and related accumulated depreciation of the assets are removed
from the accounts and the resulting gain or loss, if any, is reflected in the results of operations. Depreciation is computed on the straight-
line method over the assets’ estimated useful lives as follows:

Furniture and fixtures
Equipment
Leasehold improvements
Hardware and software

Intangibles

Domain Name

Five to ten years
Five to ten years
Lesser of useful lives or related lease term
Three to seven years

In fiscal 2018, the Company purchased the rights to the domain name “dxl.com.” The domain name has a carrying value of $1.2 million
and is considered an indefinite-lived asset. At each reporting period, management analyzes current events and circumstances to
determine whether the indefinite life classification continues to be valid. At least annually, during the fourth quarter or whenever events
or changes in circumstances indicate the carrying value may not be fully recoverable, the intangible is assessed for impairment using a
quantitative impairment model. In the fourth quarter of fiscal 2021, the domain name was assessed for potential impairment and the
Company concluded that the domain name was not impaired.

Pre-opening Costs

The Company expenses all pre-opening costs for its stores as incurred.

Advertising Costs

The Company expenses in-store advertising costs as incurred. Television advertising costs, if any, are expensed in the period in which
the advertising is first aired. Direct response advertising costs, if any, are deferred and amortized over the period of expected direct
marketing revenues, which is less than one year. There were no deferred direct response costs at January 29, 2022 and January 30, 2021.
Advertising expense, which is included in selling, general and administrative expenses, was $24.0 million, $11.9 million and $22.9
million for fiscal 2021, 2020 and 2019, respectively.

Revenue Recognition

The Company’s accounting policies with respect to revenue recognition are discussed in Note B, “Revenue Recognition.”

Foreign Currency Translation

At January 29, 2022, the Company had one store located in Toronto, Canada. Assets and liabilities for this store were translated into
U.S. dollars at the exchange rates in effect at each balance sheet date. Stockholders’ equity (deficit) was translated at applicable historical
exchange rates. Income, expense and cash flow items were translated at average exchange rates during the period. Resulting translation
adjustments were reported as a separate component of stockholders’ equity (deficit). The Company's store in Toronto, Canada was
closed subsequent to the end of fiscal 2021.

During fiscal 2019, the Company closed its Rochester Clothing store in London, England. In connection with exiting its operations in
England, the Company recognized a total charge of $1.7 million, which included the recognition of the associated accumulated foreign
currency translation adjustment of $0.8 million as an expense in fiscal 2019. See “Accumulated Other Comprehensive Income (Loss) –
(“AOCI”)” below. The remainder of the charge primarily related to lease termination and inventory liquidation costs.

Accumulated Other Comprehensive Income (Loss) – (“AOCI”)

Other comprehensive income (loss) includes amounts related to foreign currency and pension plans and is reported in the Consolidated
Statements of Comprehensive Income (Loss). Other comprehensive income (loss) and reclassifications from AOCI for fiscal 2021,
fiscal 2020 and fiscal 2019 are as follows:

(in thousands)

Balance at beginning of fiscal year

$ (6,224) $

3 $ (6,221) $ (6,478) $

47 $ (6,431) $ (5,521) $

(662) $

(6,183)

Pension
Plans

Foreign
Currency

Total

Pension
Plans

Foreign
Currency

Total

Pension
Plans

Foreign
Currency

Total

Fiscal 2021

Fiscal 2020

Fiscal 2019

Other comprehensive income (loss)

before reclassifications, net of taxes

799

(62)

737

(428)

(44)

(472)

(1,598)

(83)

(1,681)

Recognition of accumulated foreign
currency translation adjustment (1)

Amounts reclassified from
accumulated

other comprehensive income (loss),
net of taxes (2)

Other comprehensive income

(loss) for the period

—

792

(41)

—

(41)

682

—

682

641

—

641

758

(62)

696

254

(44)

210

(957)

709

(248)

Balance at end of fiscal year

$ (5,466) $

(59) $ (5,525) $ (6,224) $

3 $ (6,221) $ (6,478) $

(6,431)

(1)

(2)

In connection with the Company’s closing of its Rochester Clothing store in London, England and exiting its London operations,
the Company recognized the accumulated foreign currency translation adjustment as an expense and it was included in “Exit costs
associated with London operations” on the Consolidated Statement of Operations for fiscal 2019.
Includes the amortization of the unrecognized (gain)/loss on pension plans, which was charged to “Selling, General and
Administrative” expense on the Consolidated Statements of Operations for all periods presented. The amortization of the
unrecognized loss, before tax, was $682,000 and $641,000 for fiscal 2020 and fiscal 2019, respectively. For fiscal 2021, the
Company recognized income of $41,000, as a result of a change in amortization from average remaining future service to average
remaining lifetime. There was no related tax effect for any period.

Income Taxes

Deferred income taxes are provided to recognize the effect of temporary differences between tax and financial statement reporting. Such
taxes are provided for using enacted tax rates expected to be in place when such temporary differences are realized. A valuation
allowance is recorded to reduce deferred tax assets if it is determined that it is more likely than not that the full deferred tax asset would
not be realized. If it is subsequently determined that a deferred tax asset will more likely than not be realized, a credit to earnings is
recorded to reduce the allowance.

ASC Topic 740, Income Taxes (“ASC 740”) clarifies a company’s accounting for uncertain income tax positions that are recognized in
its financial statements and also provides guidance on a company’s de-recognition of uncertain positions, financial statement
classification, accounting for interest and penalties, accounting for interim periods, and disclosure requirements. In accordance with
ASC 740, the Company will recognize the benefit from a tax position only if it is more likely than not that the position would be
sustained upon audit based solely on the technical merits of the tax position. The Company’s policy is to recognize accrued interest and
penalties related to unrecognized tax benefits as income tax expense in its Consolidated Statement of Operations. The Company has
not accrued or paid interest or penalties in amounts that were material to its results of operations for fiscal 2021, fiscal 2020 and fiscal
2019.

The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. The Company has
concluded all U.S. federal income tax matters for years through fiscal 2001, with remaining fiscal years subject to income tax
examination by federal tax authorities.

Net Income (Loss) Per Share

Basic earnings per share are computed by dividing net income (loss) by the weighted average number of shares of common stock
outstanding during the respective period. Diluted earnings per share is determined by giving effect to unvested shares of restricted stock,
deferred stock and restricted stock units (RSUs) and the exercise of stock options using the treasury stock method. The following table
provides a reconciliation of the number of shares outstanding for basic and diluted earnings per share:

(in thousands)
Common stock outstanding:
Basic weighted average common shares

outstanding

Common stock equivalents – stock options,
restricted stock, deferred stock and RSUs (1)
Diluted weighted average common shares

outstanding

January 29, 2022

FISCAL YEARS ENDED
January 30, 2021

February 1, 2020

63,401

4,630

68,031

51,317

49,992

—

51,317

49,992

(1) Common stock equivalents, in thousands, of 159 shares and 408 shares for January 30, 2021 and February 1, 2020,

respectively, were excluded due to the net loss.

The following potential common stock equivalents were excluded from the computation of diluted earnings per share in each year
because the exercise price of such options was greater than the average market price per share of common stock for the respective
periods or because the unearned compensation associated with either stock options, RSUs, restricted or deferred stock had an anti-
dilutive effect.

(in thousands, except exercise prices)
Stock options (time-vested)
RSUs (time-vested)
Deferred stock
Range of exercise prices of such options

January 29, 2022

FISCAL YEARS ENDED
January 30, 2021

February 1, 2020

302
—
—
$4.19 -$5.50

3,648
812
191
$0.53 - $7.02

755
560
114
$1.85 - $7.02

Excluded from the computation of basic and diluted earnings per share for fiscal 2021 were 240,000 shares of unvested performance
stock units. For fiscal 2020 and fiscal 2019 720,000 shares of unvested performance stock units were excluded. These performance-
based awards will be included in the computation of basic and diluted earnings per share if, and when, the respective performance targets
are achieved. In addition, deferred stock of 435,568 shares for fiscal 2021 and fiscal 2020 and 295,604 shares for fiscal 2019 were
excluded from basic earnings per share. Outstanding shares of deferred stock are not considered issued and outstanding until the vesting
date of the deferral period and are excluded from basic earnings per share until such shares are issued.

Stock-based Compensation

ASC Topic 718, Compensation – Stock Compensation, requires measurement of compensation cost for all stock awards at fair value on
date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is
determined using the Black-Scholes valuation model and requires the input of subjective assumptions. These assumptions include
estimating the length of time employees will retain their vested stock options before exercising them (the “expected term”), the estimated
volatility of the Company’s common stock price over the expected term and the number of options that will ultimately not complete
their vesting requirements (“forfeitures”). As required under the accounting rules, the Company reviews its valuation assumptions at
each grant date and, as a result, is likely to change its valuation assumptions used to value employee stock-based awards granted in
future periods. The values derived from using the Black-Scholes model are recognized as expense over the vesting period, net of
estimated forfeitures. The estimation of stock awards that will ultimately vest requires judgment. Actual results, and future changes in
estimates, may differ from the Company’s current estimates.

The Company recognized total stock-based compensation expense, with no tax effect, of $1.2 million, $1.4 million and $1.9 million for
fiscal 2021, fiscal 2020 and fiscal 2019, respectively.

The total stock-based compensation cost related to time-vested awards not yet recognized as of January 29, 2022 was approximately
$1.6 million and will be expensed over a weighted average remaining life of approximately 24 months.

The total grant-date fair value of awards vested was $1.7 million, $1.5 million and $3.0 million for fiscal 2021, fiscal 2020 and fiscal
2019, respectively.

Any excess tax benefits resulting from the exercise of stock options or the release of restricted shares are recognized as a component of
income tax expense.

Valuation Assumptions for Stock Options

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model based on the following
assumptions in the table. The fair value of each non-vested share is equal to the closing price of the Company’s stock on the date of
grant. The weighted-average fair value of options granted and non-vested shares granted shown below does not include shares or
deferred stock granted to directors in lieu of compensation.

Fiscal years ended:
Expected volatility
Risk-free interest rate
Expected life (in years)
Dividend rate
Weighted average fair value of options granted
Weighted average fair value of non-vested shares granted

January 29, 2022
97.4% - 104.9%
0.31% - 0.60%
3.0 - 4.0
-
$0.47
-

January 30, 2021
82.3% - 87.8%
0.22% - 0.27%
3.0 - 4.0
-
$0.32
-

February 1, 2020
-
-
-
-
-
$1.73

Expected volatilities are based on historical volatilities of the Company’s common stock; the expected life represents the weighted
average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and historical
exercise patterns; and the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding
with the expected life of the option.

Impairment of Long-Lived Assets

The Company recorded a gain of $2.3 million in fiscal 2021 against previously recorded impairment charges. Fiscal 2020 and fiscal
2019 included net impairment charges of $14.8 million and $0.9 million, respectively.

The Company reviews its long-lived assets for events or changes in circumstances that might indicate the carrying amount of the assets
may not be recoverable. The Company’s judgment regarding the identification of impairment indicators is based on operational
performance at the store level. Factors considered by the Company that could result in an impairment triggering event include significant
changes in the use of assets, a current period operating or cash flow loss, underperformance of a store relative to historical or expected
operating results, and an accumulation of costs significantly in excess of the amount originally expected for the construction of the long-
lived store assets. The Company assesses the recoverability of the assets by determining whether the carrying value of such assets over
their respective remaining lives can be recovered through projected undiscounted future cash flows. The model for undiscounted future
cash flows includes assumptions, at the individual store level, with respect to expectations for future sales and gross margin rates as well
as an estimate for occupancy costs used to estimate the fair value of the respective store’s operating lease right-of-use asset. The amount
of impairment, if any, is measured based on projected discounted future cash flows using a discount rate reflecting the Company’s
average cost of funds. With respect to the impairment charges taken on operating lease right-of-use assets, if the Company subsequently

makes a decision to close previously impaired stores and a gain is realized as a result of the reevaluation of the existing lease liabilities,
to the extent the gain related to previously recorded impairment charges against the right-of-use assets, the gain will be included as an
offset to asset impairment charges with the remainder included as a reduction in store occupancy costs.

For fiscal 2021, the Company recognized a non-cash gain of $2.7 million related to the Company’s decision to close certain retail stores,
with $2.3 million of the gain included as an offset to asset impairment charges and the remaining $0.4 million of the gain included as a
reduction of store occupancy costs.

For fiscal 2020, the Company recorded a total asset impairment charge of $14.8 million, which included $4.1 million for the write-down
of store assets and $10.7 million for the net write-down of operating lease right-of-use assets. Included in the write-down of operating
lease right-of-use assets of $10.7 million was a non-cash gain of $2.6 million related to closed stores, which had previously been
impaired.

The asset impairment charge for fiscal 2019 was $0.9 million, which included $0.7 million for the write-down of operating lease right-
of-use assets and $0.2 million for the write-down of store assets.

Leases

The Company adopted ASU 2016-02, “Leases (Topic 842)” in fiscal 2019 on a modified retrospective basis and applied the new standard
to all leases through a cumulative-effect adjustment to beginning accumulated deficit. Under ASC 842, the Company determines if an
arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset
for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use
assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease
payments, initial direct costs and any lease incentives are included in the value of those right-of use assets. As the interest rate implicit
in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, based on information available
at the lease measurement date to determine the present value of future payments. The Company elected the lessee non-lease component
separation practical expedient, which permits the Company to not separate non-lease components from the lease components to which
they relate. The Company also made an accounting policy election that the recognition requirement of ASC 842 will not be applied to
certain, if any, non-store leases with a term of 12 months or less, recognizing those lease payments on a straight-line basis over the lease
term. At January 29, 2022, the Company had no short-term leases.

The Company’s store leases typically contain options that permit renewals for additional periods of up to five years each. In general, for
store leases with an initial term of 10 years or more, the options to extend are not considered reasonably certain at lease commencement.
For stores leases with an initial term of 5 years, the Company evaluates each lease independently and, only when the Company considers
it reasonably certain that it will exercise an option to extend, will the associated payment of that option be included in the measurement
of the right-of-use asset and lease liability. Renewal options are not included in the lease term for automobile and equipment leases
because they are not considered reasonably certain of being exercised at lease commencement. Renewal options were not considered
for the Company’s corporate headquarters and distribution center lease, which was entered into in 2006 and was for an initial 20-year
term. At the end of the initial term, the Company will have the opportunity to extend this lease for six additional successive periods of
five years.

For store leases, the Company accounts for lease components and non-lease components as a single lease component. Certain store
leases may require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance
and insurance, and are expensed as incurred as variable lease costs. Other store leases contain one periodic fixed lease payment that
includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and
included in the right-of-use assets and lease liabilities. Tenant allowances are included as an offset to the right-of-use asset and amortized
as reductions to rent expense over the associated lease term.

See Note E ‘‘Leases’’ for additional information.

Recently Issued Accounting Pronouncements

No new accounting pronouncements, issued or effective during fiscal 2021, have had or are expected to have a significant impact on the
Company’s Consolidated Financial Statements.

B. REVENUE RECOGNITION

Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers. The Company operates as a retailer of
big and tall men’s clothing, which includes sales through stores, direct and wholesale channels. Revenue is recognized by the operating
segment that initiates a customer’s order. Store sales are defined as sales that originate and are fulfilled directly at the store level. Direct
sales are defined as sales that originate online, including those initiated online at the store level, on its website or on third-party
marketplaces. Wholesale sales are defined as sales made to wholesale customers pursuant to the terms of each customer’s contract with
the Company. Generally, all revenues are recognized when control of the promised goods is transferred to customers, in an amount that
reflects the consideration in exchange for those goods. Sales tax collected from customers and remitted to taxing authorities is excluded
from revenue and is included as part of accrued expenses on the Consolidated Balance Sheets.

Revenue from the Company’s store operations is recorded upon purchase of merchandise by customers, net of an allowance
for sales returns, which is estimated based upon historical experience.

Revenue from the Company’s direct operations is recognized at the time a customer order is delivered, net of an allowance
for sales returns, which is estimated based upon historical experience.

Revenue from the Company’s wholesale operations is recognized at the time the wholesale customer takes physical receipt
of the merchandise, net of any identified discounts in accordance with each individual order. For all periods, chargebacks
were immaterial.

Unredeemed Loyalty Coupons. The Company offers a free loyalty program to its customers for which points accumulate based on the
purchase of merchandise. Over 90% of the Company’s customers participate in the loyalty program. Under ASC 606, these loyalty
points provide the customer with a material right and a distinct performance obligation with revenue deferred and recognized when the
points are redeemed. The cycle of earning and redeeming loyalty points is generally under one year in duration. The loyalty accrual,
net of breakage, was $1.3 million and $1.0 million at January 29, 2022 and January 30, 2021, respectively.

Unredeemed Gift Cards, Gift Certificates, and Credit Vouchers. Upon issuance of a gift card, gift certificate, or credit voucher, a liability
is established for its cash value. The liability is relieved and net sales are recorded upon redemption by the customer. Based on historical
redemption patterns, the Company can reasonably estimate the amount of gift cards, gift certificates, and credit vouchers for which
redemption is remote, which is referred to as "breakage". Breakage is recognized over two years in proportion to historical redemption
trends and is recorded as sales in the Consolidated Statements of Operations. The gift card liability, net of breakage, was $3.3 million
and $2.8 million at January 29, 2022 and January 30, 2021, respectively.

Shipping. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales for all periods presented.
Amounts related to shipping and handling that are billed to customers are recorded in sales, and the related costs are recorded in cost of
goods sold including occupancy costs, in the Consolidated Statements of Operations.

Disaggregation of Revenue

As noted above under Segment Information in Note A, the Company’s business at January 29, 2022 consists of one reportable segment,
its retail segment. Substantially all of the Company’s revenue is generated from its stores and direct businesses. The operating results
from the wholesale segment have been aggregated with this reportable segment for all periods, but the revenues are separately reported
below. Accordingly, the Company has determined that the following sales channels depict the nature, amount, timing, and uncertainty
of how revenue and cash flows are affected by economic factors for each of the following fiscal years:

(in thousands)
Store sales
Direct sales
Retail segment
Wholesale segment
Total sales

Fiscal 2021

Fiscal 2020

Fiscal 2019

180,143 59.6%
122,206 40.4%
302,349 100.0%
16,597
318,946

354,929 76.9%
106,585 23.1%
461,514 100.0%
12,524
474,038

344,761 69.0%
154,891 31.0%
499,652 100.0%

5,369
505,021

C. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at the dates indicated:

(in thousands)
Furniture and fixtures
Equipment
Leasehold improvements
Hardware and software
Construction in progress

Less: accumulated depreciation
Total property and equipment, net

January 29,
2022

January 30,
2021

75,358 $
23,299
115,821
102,950
2,376
319,804
275,362
44,442 $

76,770
23,083
117,394
100,771
1,884
319,902
263,350
56,552

Depreciation expense for fiscal 2021, 2020 and 2019 was $17.2 million, $21.5 million and $24.6 million, respectively.

D. DEBT OBLIGATIONS

Credit Agreement with Citizens Bank, N.A.

On October 28, 2021, the Company entered into a new credit facility with Citizens Bank, N.A. (the “New Credit Facility”). The New
Credit Facility replaced the Company's existing credit facility with Bank of America, N.A., which was due to expire on May 24, 2023
(the "Prior Credit Facility").

The New Credit Facility is a $125.0 million secured, asset-based credit facility with a maturity date of October 28, 2026. The maximum
committed borrowing of $125.0 million includes a sublimit of $20.0 million for commercial and standby letter of credits and a sublimit
of up to $15.0 million for swing line loans. The Company’s ability to borrow under the Credit Facility is determined using an availability
formula based on eligible assets.

Borrowings made pursuant to the New Credit Facility will be made pursuant to either a Base Rate loan or LIBOR Rate loan, at the
Company's option. Base Rate loans will bear interest, at a rate equal to (i) the greater of: (a) the Prime Rate, (b) the Federal Funds
effective rate plus 0.50% per annum and (c) the daily LIBOR rate plus 1.00% per annum, plus (ii) a varying percentage, based on the
Company’s average excess availability, of either 0.25% or 0.50%. LIBOR Rate loans, which may be either for 1 month or 3 months,
will bear interest at (i) the LIBOR rate, or the Benchmark Rate as defined in the credit agreement plus (ii) a varying percentage based
on the Company’s average excess availability, of either 1.25% or 1.50%. Any swingline loan will bear interest at a rate equal to the rate
of a Base Rate loan, plus a varying percentage based on the Company’s average excess availability, of either 0.25% or 0.50%. The
Company will be subject to an unused line fee of 0.25%.

The Company’s obligations under the New Credit Facility are secured by a lien on substantially all of its assets. If the Company’s
availability under the New Credit Facility at any time is less than the greater of (i) 10% of the Revolving Loan Cap (the lesser of the
aggregate revolving commitments or the borrowing base) and (ii) $7.5 million, then the Company is required to maintain a minimum
consolidated fixed charge coverage ratio of 1.0:1.0 until such time as availability has exceeded the greater of (1) 10% of the Revolving
Loan Cap and (2) $7.5 million for 30 consecutive days.

In connection with the execution of the New Credit Facility, the Company terminated its Prior Credit Facility and paid outstanding
obligations of $30,874, related to its unused line fee and letter of credit fees. At the same time, all guarantees and security interests
associated with the Prior Credit Agreement were released. There were no outstanding borrowings under the Prior Credit Facility at the
time of termination and no prepayment penalty fees.

At January 29, 2022, the Company had no borrowings outstanding and availability of $68.9 million under the New Credit Facility.
Average monthly borrowings outstanding during fiscal 2021 were $16.4 million, resulting in an average unused excess availability of
approximately $56.2 million. Outstanding standby letters of credit were $2.7 million and outstanding documentary letters of $1.4 million
at January 29, 2022.

Because there have been no borrowings under the New Credit Facility, the majority of interest costs incurred during fiscal 2021 were
based on the Prior Credit Facility, which bore interest based upon either the Federal Funds rate or the LIBOR rate, at a rate equal to the
following: (a) the Federal Funds rate plus a varying percentage based on the Company’s excess availability, of either 1.75% or 2.00%,
or (b) the LIBOR rate (the Company being able to select interest periods of 1 week, 1 month, 2 months, 3 months or 6 months) plus a
varying percentage based on the Company’s excess availability, of either 2.75% or 3.00%.

Borrowings and repayments under the credit facilities for fiscal 2021, fiscal 2020 and fiscal 2019 were as follows:

(in thousands)
Borrowings
Repayments
Net borrowings (repayments)

Long-Term Debt

Fiscal 2021

Fiscal 2020

Fiscal 2019

40,297
(100,030)
(59,733) $

64,226
(44,071)
20,155

152,336
(155,026)
(2,690)

On March 16, 2021, the Company refinanced its then existing $15.0 million FILO (first-in, last-out) loan and entered into a new $17.5
million FILO loan (the “New FILO loan”). On September 3, 2021, the Company repaid in full its New FILO loan. In connection with
the repayment, the FILO lender agreed to a reduction in the amount of the prepayment premium that otherwise would have been payable
as a result of the Company’s early repayment. The Company paid a prepayment penalty of $1.1 million which was included in interest
expense, net on the Consolidated Statement of Operations for fiscal 2021. The prepayment of the New FILO loan was made from cash
on-hand. Interest under the New FILO loan bore interest at 8.5%.

Interest and Fees

The Company paid interest and fees totaling $3.2 million, $3.8 million and $3.3 million for fiscal 2021, fiscal 2020 and fiscal 2019,
respectively. Included in the $3.2 million for fiscal 2021 was a prepayment penalty associated with the prepayment of the New FILO
loan, as discussed above. In connection with the execution of the Company's New Credit Facility and the prepayment of its New FILO
loan, the Company also wrote-off a total of $0.9 million in unamortized debt issuance costs during fiscal 2021, which was included in
interest expense, net on the Consolidated Statement of Operations for fiscal 2021.

E. LEASES

The Company leases all of its store locations and its corporate headquarters, which also includes its distribution center, under operating
leases. The store leases typically have initial terms of 5 years to 10 years, with options that usually permit renewal for additional five-
year periods. The initial term of the lease for the corporate headquarters was for 20 years, with the opportunity to extend for six
additional successive periods of five years, beginning in fiscal 2026. The Company also leases certain equipment and other assets under
operating leases, typically with initial terms of 3 to 5 years. The Company is generally obligated for the cost of property taxes, insurance
and common area maintenance fees relating to its leases, which are considered variable lease costs and are expensed as incurred.

ASC 842 requires the assessment of any lease modification to determine if the modification should be treated as a separate lease and if
not, modification accounting would be applied. Lease modification accounting requires the recalculation of the ROU asset, lease liability
and lease expense over the respective lease term. In April 2020, the FASB issued guidance allowing entities to make a policy election
to account for lease concessions related to the COVID-19 pandemic as though enforceable rights and obligations for those concessions
existed. The election applies to any lessor-provided lease concession related to the impact of the COVID-19 pandemic, provided the
concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. The Company opted not
to elect this practical expedient and instead accounted for these rent concessions as lease modifications in accordance with ASC 842.
As of January 29, 2022, the Company’s operating leases liabilities represent the present value of the remaining future minimum lease
payments updated based on concessions and lease modifications.

Lease costs related to store locations are included in cost of goods sold including occupancy costs on the Consolidated Statements of
Operations, and expenses and lease costs related to the corporate headquarters, automobile and equipment leases are included in selling,
general and administrative expenses on the Consolidated Statement of Operations.

The following table is a summary of the Company’s components of lease cost for fiscal 2021, fiscal 2020 and fiscal 2019:

(in thousands)
Operating lease cost
Variable lease costs(1)
Total lease costs

Fiscal 2021

Fiscal 2020

Fiscal 2019

43,921
13,290
57,211

47,076
14,391
61,467

53,051
16,248
69,299

(1) Variable lease costs include the cost of property taxes, insurance and common area maintenance fees related to its leases.

Supplemental cash flow and balance sheet information related to leases for fiscal 2021, fiscal 2020 and fiscal 2019 is as follows:

(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases (1)
Non-cash operating activities:
Right-of-use assets obtained in exchange for operating lease liabilities
Net decrease in right-of-use assets due to lease modifications

associated with rent concessions and lease exits

Fiscal 2021

Fiscal 2020

Fiscal 2019

57,816

30,777

—

47,330

645

(6,463)

58,046

5,401

—

Weighted average remaining lease term
Weighted average discount rate

4.3 yrs.

6.91%

4.5 yrs.

6.47%

5.4 yrs.

7.10%

(1) The decrease in cash payments for fiscal 2020 as compared to fiscal 2021 and fiscal 2019 was primarily due to rent

abatements and deferments negotiated during fiscal 2020 in response to the COVID-19 pandemic.

The table below reconciles the undiscounted cash flows for each of the next five years and thereafter to the operating lease liabilities
recorded on the Consolidated Balance Sheet as of January 29, 2022:

(in thousands)
2022
2023
2024
2025
2026
Thereafter
Total minimum lease payments
Less: amount of lease payments representing interest
Present value of future minimum lease payments
Less: current obligations under leases
Noncurrent lease obligations

F. INCOME TAXES

45,667
45,828
36,301
27,977
15,214
9,722
180,709
25,104
155,605
35,191
120,414

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Under ASC Topic 740, deferred tax assets
and liabilities are recognized based on temporary differences between the financial statement and tax basis of assets and liabilities using
enacted tax rates in effect in the years in which the differences are expected to reverse. The accounting standards require current
recognition of net deferred tax assets to the extent it is more likely than not such net assets will be realized. To the extent that the
Company believes its net deferred tax assets will not be realized, a valuation allowance must be recorded against those assets.

At the end of fiscal 2013, the Company entered a three-year cumulative loss and based on all positive and negative evidence at February
1, 2014, the Company established a full valuation allowance against its net deferred tax assets. While the Company returned to
profitability in fiscal 2021, until the Company emerges from its three-year cumulative loss and is able to demonstrate consistent and
prolonged profitability, the Company believes that a full allowance remains appropriate at this time. Realization of the Company’s
deferred tax assets is dependent on generating sufficient taxable income in the near term.

As of January 29, 2022, for federal income tax purposes, the Company has net operating loss carryforwards of $100.7 million, which
will expire from fiscal 2028 through fiscal 2037 and net operating loss carryforwards of $43.1 million that are not subject to expiration.
For state income tax purposes, the Company has $90.0 million of net operating losses that are available to offset future taxable income,
the majority of which will expire from fiscal 2028 through fiscal 2041. Additionally, the Company has $5.3 million of net operating
loss carryforwards related to the Company’s operations in Canada, which will expire from fiscal 2025 through fiscal 2041.

The utilization of net operating loss carryforwards and the realization of tax benefits in future years depends predominantly upon having
taxable income. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result
in a limitation on the amount of net operating loss carryforwards and tax credit carryforwards, which may be used in future years. As
of January 29, 2022, there has been no such ownership change.

The components of the net deferred tax assets as of January 29, 2022 and January 30, 2021 were as follows (in thousands):

Deferred tax assets, net:

Net operating loss carryforward
Accrued expenses and other
Operating lease liabilities
Goodwill and intangibles
Unrecognized loss on pension and pension expense
Inventory reserves
Foreign tax credit carryforward
Federal wage tax credit carryforward
State tax credits
Operating lease right-of-use assets
Property and equipment

Subtotal

Valuation allowance
Net deferred tax assets

January 29,
2022

January 30,
2021

36,790 $
5,223
40,301
11
1,883
1,054
486
824
147
(33,103)
(3,597)
50,019 $
(50,019)

— $

50,197
2,706
45,557
87
2,067
1,002
486
824
147
(34,365)
(5,605)
63,103
(63,103)
—

For fiscal 2021, the Company had total deferred tax assets of $86.7 million, total deferred tax liabilities of $36.7 million and a
valuation allowance of $50.0 million.

The provision for income taxes consisted of the following:

(in thousands)
Current:
Federal
State
Foreign

Deferred:
Federal
State
Foreign

Total provision

January 29, 2022

FISCAL YEARS ENDED
January 30, 2021

February 1, 2020

— $
912
5
917

—
—
—
—
917 $

— $
99
7
106

—
—
—
—
106 $

—
97
8
105

—
—
—
—
105

The following is a reconciliation between the statutory and effective income tax rates in dollars for the provision for income tax:

(in thousands)
Federal income tax at the statutory rate
State taxes, net of federal tax benefit
Section 162(m) limitation
Permanent items
Change in valuation allowance (1)
Other, net
Total provision

January 29,
2022

FISCAL YEARS ENDED
January 30,
2021

February 1,
2020

12,102 $
721
1,375
(893)
(12,421)
33
917 $

(13,531) $
78
197
245
13,167
(50)
106 $

(1,615)
77
541
277
850
(25)
105

(1)

The change in valuation allowance excludes the amounts allocable to state income tax, which is presented in State taxes, net of
federal tax benefit, and other comprehensive income. The change in valuation allowance in fiscal 2019 was impacted by the
adoption of ASC 842 in the tax-effected amount of $1.4 million.

As discussed in Note A, the Company’s financial statements reflect the expected future tax consequences of uncertain tax positions that
the Company has taken or expects to take on a tax return, based solely on the technical merits of the tax position. The liability for
unrecognized tax benefits at January 29, 2022 and January 30, 2021 was approximately $2.0 million and was associated with a prior tax
position related to exiting the Company’s direct business in Europe during fiscal 2013. The amount of unrecognized tax benefits has

been presented as a reduction in the reported amounts of the Company’s federal and state net operating losses carryforwards. No penalties
or interest have been accrued on this liability because the carryforwards have not yet been utilized. The reversal of this liability would
result in a tax benefit being recognized in the period in which the Company determines the liability is no longer necessary.

For fiscal 2021, the Company made tax payments of $0.6 million, as compared to $0.1 million for both fiscal 2020 and fiscal 2019.

G. COMMITMENTS AND CONTINGENCIES

At January 29, 2022, the Company was obligated under operating leases covering store and office space, automobiles and certain
equipment for future minimum rentals. See Note E, “Leases” for the schedule of future remaining lease obligations. In addition to its
lease obligations, the Company is also contractually committed pursuant to a merchandise purchase obligation to meet minimum
purchases of $10.0 million in each fiscal year through fiscal 2023.

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. When a loss is considered
probable, the Company records an accrual based on the reasonably estimable loss or range of loss. Costs related to such legal proceedings
are expensed and reported in selling, general, and administrative expenses in the Consolidated Statements of Operations. The Company
believes its current accruals at January 29, 2022 are adequate in light of the probable and estimable liabilities. The Company does not
believe that any identified claims or litigation will be material to its results of operations, cash flows, or financial condition.

H. LONG-TERM INCENTIVE PLANS

The following is a summary of the Company’s Long-Term Incentive Plan (“LTIP”). All equity awards granted under these long-term
incentive plans were issued from the Company’s stockholder-approved 2016 Incentive Compensation Plan. See Note I, “Stock
Compensation Plans.”

At January 29, 2022, the Company has three active LTIPs: 2019-2021 LTIP, 2020-2022 LTIP and 2021-2023 LTIP. Each participant in
the plan participates based on that participant’s “Target Cash Value” which is defined as the participant’s annual base salary (on the
participant’s effective date) multiplied by his or her LTIP percentage. Under each LTIP, 50% of each participant’s Target Cash Value
is subject to time-based vesting and 50% is subject to performance-based vesting. The time-based awards under the 2019-2021 LTIP
were granted in a combination of 50% RSUs and 50% cash. For the 2020-2022 LTIP, the time-based awards were granted in a
combination of 50% stock options and 50% cash, and for the 2021-2023 LTIP, the time-based awards were granted in a combination of
25% stock options and 75% cash.

Performance targets for the 2019-2021 LTIP, 2020-2022 LTIP and 2021-2023 LTIP were established and approved by the Compensation
Committee on August 7, 2019, June 11, 2020, and March 8, 2021, respectively. The performance period for each LTIP is three years.
Awards for any achievement of performance targets will not be granted until the performance targets are achieved and then will be
subject to additional vesting through August 31, 2022, August 31, 2023 and August, 31, 2024, respectively. The time-based awards
under the 2019-2021 LTIP, 2020-2022 LTIP and 2021-2023 LTIP vest in four equal installments through April 1, 2023, April 1, 2024
and April 1, 2025, respectively.

Assuming that the Company achieves the performance targets at target levels and all time-based awards vest, the compensation expense
associated with the 2019-2021 LTIP, 2020-2022 LTIP and 2021-2023 LTIP is estimated to be approximately $3.8 million, $3.8 million
and $4.0 million, respectively. Approximately half of the compensation expense for each LTIP relates to the time-based awards, which
are being expensed straight-line over 44 months, 46 months and 49 months, respectively.

The performance targets under the 2019-2021 LTIP were achieved at the end of fiscal 2021. Based on that achievement, subsequent to
the end of fiscal 2021, on March 15, 2022, the Compensation Committee approved a total performance award of $2.6 million, to be
awarded in a combination of 50% cash and 50% RSUs. All awards are subject to further vesting through August 31, 2022. Accordingly,
at January 29, 2022, the Company has accrued $2.3 million of the $2.6 million award.

At January 29, 2022, the Company has accrued $1.5 million and $0.8 million for the performance awards under the 2020-2022 LTIP
and 2021-2023 LTIP, respectively.

I. STOCK COMPENSATION PLANS

The Company has one active stock-based compensation plan: the 2016 Incentive Compensation Plan (the “2016 Plan”). The initial
share reserve under the 2016 Plan was 5,725,538 shares of our common stock. A grant of a stock option award or stock appreciation
right will reduce the outstanding reserve on a one-for-one basis, meaning one share for every share granted. A grant of a full-value
award, including, but not limited to, restricted stock, restricted stock units and deferred stock, will reduced the outstanding reserve by a
fixed ratio of 1.9 shares for every share granted. The Company’s shareholders approved amendments to increase the share reserve by
2,800,000 shares on August 8, 2019, an additional 1,740,000 shares on August 12, 2020 and an additional 4,855,000 on August 5, 2021.
At January 29, 2022, the Company had 4,800,386 shares available under the 2016 Plan.

In accordance with the terms of the 2016 Plan, any shares outstanding under the previous 2006 Incentive Compensation Plan (the “2006
Plan”) at August 4, 2016 that subsequently terminate, expire or are cancelled for any reason without having been exercised or paid are
added back and become available for issuance under the 2016 Plan, with stock options being added back on a one-for-one basis and full-
value awards being added back on a 1 to 1.9 basis. At January 29, 2022, there were 298,231 stock options that remain outstanding under
the 2006 Plan.

The 2016 Plan is administered by the Compensation Committee. The Compensation Committee is authorized to make all determinations
with respect to amounts and conditions covering awards. Options are not granted at a price less than fair value on the date of the grant.
Except with respect to 5% of the shares available for awards under the 2016 Plan, no award will become exercisable or otherwise
forfeitable unless such award has been outstanding for a minimum period of one year from its date of grant.

Stock Option Activity

The following tables summarize the stock option activity under the Company’s 2006 Plan and 2016 Plan, on an aggregate basis, for
fiscal 2021:

Stock Options

Outstanding options at beginning of year
Options granted (1)
Options canceled or expired
Options exercised (2)
Outstanding options at end of year
Options exercisable at end of year
Vested and expected to vest at end of year

Number of
Shares

3,647,581 $
1,518,154
(22,542)
(521,643)
4,621,550 $
751,743 $
4,621,550 $

Weighted-
average
exercise price
per option

Weighted-
average
remaining
contractual term

Aggregate
intrinsic value
(000's)

1.09
0.71
4.19
1.49
0.90
2.42
0.90

8.2 yrs. $
5.6 yrs. $
8.2 yrs. $

811
—
—
2,493
16,067
1,662
16,067

(1)

Primarily represents the grant of stock options to purchase an aggregate of 1,078,913 shares of the Company's common
stock, at an exercise price of $0.69 per share, in connection with the time-based grant of awards under its 2021-2023
LTIP, see Note H, Long-Term Incentive Plans. In March 2021, the Company also granted to active participants of the
LTIP a discretionary grant of stock options to purchase an aggregate of 414,337 shares of the Company's common stock,
at an exercise price of $0.75 per share, which vest over 3 years.

(2) As a result of net share settlements, of the 521,643 stock options exercised, only 389,838 shares of common stock were

issued.

Non-Vested Share Activity

The following table summarizes activity for non-vested shares under the Company’s 2006 Plan and 2016 Plan, on an aggregate basis,
for fiscal 2021:

Outstanding non-vested shares at beginning of year
Shares granted
Shares vested/issued
Outstanding non-vested shares at end of year
Vested and expected to vest at end of year

Deferred
shares (2)

Performance
Share
Units (3)

Total number
of shares

Weighted-
average
grant-date
fair value

435,568
—
—
435,568
435,568

720,000
—
(480,000)
240,000
—

1,970,860 $
8,054
(788,055)
1,190,859 $
950,859

1.69
0.66
1.85
1.57

RSUs (1)

815,292
8,054
(308,055)
515,291
515,291

(1) During fiscal 2021, the vesting of RSUs was primarily related to the time-based awards under the Company’s LTIP plans,

see Note H, Long-Term Incentive Plans.

(2) Represents compensation to certain directors, in lieu of cash, in accordance with their irrevocable elections. During fiscal
2021, all equity issued to directors for compensation, in lieu of cash, was issued only from the Non-Employee Director
Compensation Plan. The outstanding deferred shares will be issued upon the director’s separation from service.

(3)

The 720,000 shares of performance stock units (“PSUs”), with a fair value of $1.0 million, represent a sign-on grant in fiscal
2019 to Mr. Kanter. The PSUs vest in installments when the following milestones are met: one-third of the PSUs vest when
the trailing 90-day volume-weighted average closing stock price (“VWAP”) is $4.00, one-third of the PSUs vest when the
VWAP is $6.00, and one-third when the VWAP is $8.00. During fiscal 2021, 480,000 PSUs vested as a result of achieving

a VWAP of $4.00 per share and $6.00 per share. As a result of net share settlement, of the 480,000 PSUs that vested, only
327,120 shares of common stock were issued. The remaining 240,000 PSUs will expire on April 1, 2023 if the $8.00 VWAP
is not achieved by that date.

Non-Employee Director Compensation Plan

In January 2010, the Company established a Non-Employee Director Stock Purchase Plan to provide a convenient method for its non-
employee directors to acquire shares of the Company’s common stock at fair market value by voluntarily electing to receive shares of
common stock in lieu of cash for service as a director. The substance of this plan is now encompassed within the Company’s Sixth
Amended and Restated Non-Employee Director Compensation Plan.

Through the end of fiscal 2020, non-employee directors were required to take 50% of their annual retainer, which was paid quarterly,
in equity. Any shares of common stock or deferred stock issued to a director as part of this 50% requirement were issued from the 2016
Plan. Only discretionary elections of shares of common stock were issued from the Non-Employee Director Compensation Plan.

In November 2020, the Board of Directors approved the Fifth Amended and Restated Non-Employee Director Compensation Plan and
all compensation in fiscal 2021 was earned pursuant to this amended plan. The plan was amended to, among other things, increase the
number of shares available for grant under the plan by an additional 1,000,000 shares, limit the number of shares that can be issued each
quarter to 250,000 shares (with any shortfall satisfied in cash), removed the requirement for directors to take 50% of their annual retainer
in equity and removed the ability for directors to select deferred stock.

In December 2021, the Board of Directors approved the Sixth Amended and Restated Non-Employee Director Compensation Plan,
which will be effective for board compensation in fiscal 2022. The plan was amended to, among other things, add a minimum equity
ownership requirement which will require each director to receive at least 60% of their annual retainers in shares of common stock until
the value of their equity ownership is equal to at least three times the annual retainer. Any shares issued to satisfy the minimum equity
ownership will be granted from the 2016 Plan. All other shares will be granted under the Non-Employee Director Compensation Plan.
The amended plan still limits the maximum number of shares that can be issued in any quarter to 250,000 shares, in aggregate.

The following shares of common stock, with the respective fair value, were issued from the Non-Employee Director Compensation
Plan to its non-employee directors as compensation for fiscal 2021, fiscal 2020 and fiscal 2019:

Fiscal 2021
Fiscal 2020
Fiscal 2019

Number of shares of
common stock issued

Fair value of
common stock issued

232,910
187,897
37,113

$
$
$

374,227
75,065
69,991

At January 29, 2022, 767,090 shares remain available for grant under the Sixth Amended and Restated Non-Employee Director
Compensation Plan.

J. EMPLOYEE BENEFIT PLANS

The Company accounts for its employee benefit plans in accordance with ASC Topic 715, Compensation – Retirement Benefits. ASC
Topic 715 requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a
liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of
the employer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit postretirement
plan in the year in which the changes occur.

These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s accounting policy for amortizing
such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in
the same periods will be recognized as a component of accumulated other comprehensive income (loss). In fiscal 2021, the amortization
of the unrecognized loss was calculated based on the average remaining lifetime of all employees, as opposed to the average remaining
future service of active employees. As a result of this change in amortization, the Company expects a decrease in net periodic pension
cost in fiscal 2022 of $47,000.

Noncontributory Pension Plan

In connection with the Casual Male acquisition in May 2002, the Company assumed the assets and liabilities of the Casual Male
Noncontributory Pension Plan “Casual Male Corp. Retirement Plan”, which was previously known as the J. Baker, Inc. Qualified Plan
(the “Pension Plan”). Casual Male Corp. froze all future benefits under this plan on May 1, 1997.

The following table sets forth the Pension Plan’s funded status at January 29, 2022 and January 30, 2021:

Change in benefit obligation:
Balance at beginning of period
Benefits and expenses paid
Interest costs
Settlements
Actuarial (gain) loss
Balance at end of year

Change in fair value of plan assets:
Balance at beginning of period
Actual return on plan assets
Employer contributions
Settlements
Benefits and expenses paid
Balance at end of period

Reconciliation of funded status:
Projected benefit obligation
Fair value of plan assets
Unfunded status

Balance sheet classification:
Other long-term liabilities

January 29,
2022

January 30,
2021

in thousands

15,864 $
(839)
373
(353)
(684)
14,361 $

11,351 $
512
622
(353)
(839)
11,293 $

16,217
(877)
430
(410)
504
15,864

11,483
544
611
(410)
(877)
11,351

14,361 $
11,293
(3,068) $

15,864
11,351
(4,513)

3,068 $

4,513

Total plan expense and other amounts recognized in accumulated other comprehensive loss for the years ended January 29, 2022,
January 30, 2021 and February 1, 2020 include the following components:

Net pension cost:
Interest cost on projected benefit obligation
Expected return on plan assets
Amortization of unrecognized loss
Net pension cost

Other changes recognized in other comprehensive loss,

before taxes:

Unrecognized losses at the beginning of the year
Net periodic pension cost
Employer contribution
Change in plan assets and benefit obligations
Unrecognized losses at the end of year

January 29,
2022

January 30,
2021
(in thousands)
430
$
(737)
989
682

373
(728)
314
(41) $

6,914
41
622
(1,445)
6,132

7,206
(682)
611
(221)
6,914

February 1,
2020

581
(724)
784
641

6,303
(641)
420
1,124
7,206

The Company’s contribution for fiscal 2022 is estimated to be approximately $864,000.

Assumptions used to determine the benefit obligations as of January 29, 2022 and January 30, 2021 include a discount rate of 3.00% for
fiscal 2021 and 2.39% for fiscal 2020. Assumptions used to determine the net periodic benefit cost for the years ended January 29, 2022,
January 30, 2021 and February 1, 2020 included a discount rate of 2.39% for fiscal 2021, 2.72% for fiscal 2020 and 3.98% for fiscal
2019.

The expected long-term rate of return for plan assets was assumed to be 6.50% for both fiscal 2021 and fiscal 2020. The expected long-
term rate of return assumption was developed considering historical and future expectations for returns for each asset class.

Estimated Future Benefit Payments

The estimated future benefits for the next ten fiscal years are as follows:

FISCAL YEAR
2022
2023
2024
2025
2026
2027-2031

Total
(in thousands)

908
922
916
907
916
4,502

Plan Assets

The fair values of the Company’s noncontributory defined benefit retirement plan assets at the end of fiscal 2021 and fiscal 2020, by
asset category, were as follows:

January 29, 2022

January 30, 2021

Fair Value Measurement

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs (Level 3)

Total

Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)

Significant
Observable
Inputs (Level
2)

Significant
Unobservable
Inputs (Level 3)

Total

—
—
—
—
— $

— $
—
—
—
— $

4,446 $
3,254
3,486
107
11,293 $

4,071
2,939
3,527
814
11,351 $

—
—
—
—
— $

— $
—
—
—
— $

4,071
2,939
3,527
814
11,351

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

4,446
3,254
3,486
107
11,293 $

(in thousands)
Asset category:
Mutual Funds:
U.S. Equity
International Equity

Fixed Income
Cash
Total

The Company’s target asset allocation for fiscal 2022 and its asset allocation at January 29, 2022 and January 30, 2021 were as
follows, by asset category:

Asset category:
Equity securities
Debt securities
Cash
Total

Target Allocation

Percentage of plan assets at

Fiscal 2022

January 29,
2022

January 30,
2021

63.0%
35.0%
2.0%
100.0%

68.2%
30.9%
0.9%
100.0%

61.7%
31.1%
7.2%
100.0%

The target policy is set to maximize returns with consideration to the long-term nature of the obligations and maintaining a lower level
of overall volatility through the allocation of fixed income. The asset allocation is reviewed throughout the year for adherence to the
target policy and is rebalanced periodically towards the target weights.

Supplemental Executive Retirement Plan

In connection with the Casual Male acquisition, the Company also assumed the liability of the Casual Male Supplemental Retirement
Plan (the “SERP”).

The following table sets forth the SERP’s funded status at January 29, 2022 and January 30, 2021:

Change in benefit obligation:
Balance at beginning of period
Benefits and expenses paid
Interest costs
Actuarial (gain) loss
Balance at end of year

Change in fair value of plan assets:
Balance at beginning of period
Employer contributions
Benefits and expenses paid
Balance at end of period

Projected benefit obligation

Reconciliation of funded status:
Projected benefit obligation
Fair value of plan assets
Unfunded Status

Balance sheet classification:
Other long-term liabilities

January 29,
2022

January 30, 2021

in thousands

563 $
(40)
12
(21)
514 $

— $
40
(40)
— $

547
(38)
14
40
563

—
38
(38)
—

514 $

563

514 $
—
(514) $

563
—
(563)

514 $

563

Other changes recognized in other comprehensive loss, before taxes (in thousands):

Other changes recognized in other comprehensive loss,

before taxes:

Unrecognized losses at the beginning of the year
Net periodic pension cost
Employer contribution
Change in benefit obligations
Unrecognized losses at the end of year

January 29,
2022

January 30,
2021
in thousands

February 1, 2020

120 $
(16)
40
(49)
95 $

82 $
(15)
38
15
120 $

28
(19)
33
40
82

Assumptions used to determine the benefit obligations as of January 29, 2022 and January 30, 2021 included a discount rate of 2.90%
for fiscal 2021 and 2.24% for fiscal 2020. Assumptions used to determine the net periodic benefit cost for the years ended January 29,
2022, January 30, 2021 and February 1, 2020 included a discount rate of 2.24% for fiscal 2021, 2.59% for fiscal 2020 and 3.87% for
fiscal 2019.

Defined Contribution Plan

The Company has one defined contribution plan, the Destination XL Group, Inc. 401(k) Savings Plan (the “401(k) Plan”). Under the
401(k) Plan, the Company offers a qualified automatic contribution arrangement (“QACA”) with the Company matching 100% of the
first 1% of deferred compensation and 50% of the next 5% (with a maximum contribution of 3.5% of eligible compensation). Employees
who are 21 years of age or older are eligible to make deferrals after 6 months of employment and are eligible to receive a Company
match after one year of employment and 1,000 hours.

In fiscal 2018, the Board ratified and approved the recommendation of the Company’s management team to suspend employer
contributions to the 401(k) Plan, for the period from July 1, 2018 until December 31, 2019 and resumed its QACA status for the 2020
plan year. For the 2021 plan year, the Company suspended its QACA safe harbor and, while not required, the Company made a
discretionary employer match for 2021. The Company has resumed its QACA status for fiscal 2022.

The Company recognized $2.0 million, $1.5 million and $0.3 million of expense under the 401(k) Plan in fiscal 2021, 2020 and 2019,
respectively.

K. REGISTERED DIRECT OFFERING - COMMON STOCK

On February 5, 2021, the Company sold, pursuant to a stock purchase agreement and through a registered direct offering, an aggregate
of 11,111,111 shares of its common stock, for a gross purchase price of $5.0 million, before payment of offering costs of $0.6 million.
The Company used the net proceeds from the offering for working capital and other general corporate purposes.

L. SUBSEQUENT EVENT

On March 15, 2022, the Company’s Board of Directors approved a stock repurchase program. Under the stock repurchase program, the
Company may repurchase up to $15.0 million of its common stock through open market and privately negotiated transactions.

The timing and the amount of any repurchases of common stock will be determined based on the Company’s evaluation of market
conditions and other factors. The stock repurchase program is expected to commence in the first quarter of fiscal 2022 and will expire
on March 15, 2023, but may be suspended, terminated or modified at any time for any reason. The Company expects to finance the
repurchases from operating funds and/or periodic borrowings on its credit facility. Any shares of repurchased common stock will be
held as treasury stock.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Management’s Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, under
the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of January 29, 2022.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of January 29, 2022, our
disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule
13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed under the supervision of our
Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our
internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements

in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition

of assets that could have a material effect on the financial statements.

There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the
circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable assurances with
respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Management assessed the design and effectiveness of our internal control over financial reporting as of January 29, 2022. In making
this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control-Integrated Framework (2013).

Based on management’s assessment and the above mentioned criteria, management determined that we maintained effective internal
control over financial reporting as of January 29, 2022.

KPMG LLP, our independent registered public accounting firm, has issued an audit report on our internal control over financial
reporting as of January 29, 2022, which appears below.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
Destination XL Group, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Destination XL Group, Inc. and subsidiaries' (the Company) internal control over financial reporting as of January
29, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of January 29, 2022, based on criteria established in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of January 29, 2022 and January 30, 2021, the related consolidated
statements of operations, comprehensive income (loss), changes in stockholders’ equity (deficit), and cash flows for each of the years
in the three-year period ended January 29, 2022, and the related notes (collectively, the consolidated financial statements), and our
report dated March 17, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal
Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Boston, Massachusetts
March 17, 2022

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the fourth quarter of fiscal 2021 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

Item 9B. Other Information.

On December 17, 2021, the Board of Directors approved the Sixth Amended and Restated Non-Employee Director Compensation
Plan, which will be effective for board compensation in fiscal 2022. The plan was amended to, among other things, add a minimum
equity ownership requirement, which will require each director to receive at least 60% of his/her annual retainer in shares of common
stock until the value of his/her equity ownership is equal to at least three times the annual retainer. Any shares issued to satisfy the
minimum equity ownership will be granted from the 2016 Plan. All other shares will be granted from the Non-Employee Director
Compensation Plan. The amended plan still limits the maximum number of shares that can be issued in any quarter to 250,000 shares,
in aggregate.

The plan was also amended to increase the compensation paid to directors as follows: annual retainer from $120,000 to $135,000, the
annual fee for chairman of the board from $20,000 to $40,000, the annual fee for the chairperson of the Audit committee from $10,000
to $20,000 and for all other committees from $5,000 to $10,000.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III.

Pursuant to Paragraph G(3) of the General Instructions to Form 10-K, the information required by Part III (Items 10, 11, 12, 13 and
14) is being incorporated by reference herein from our definitive proxy statement (or an amendment to this Annual Report on Form
10-K) to be filed with the Securities and Exchange Commission within 120 days of the end of the fiscal year ended January 29, 2022
in connection with our 2022 Annual Meeting of Stockholders.

Item 10. Directors, Executive Officers and Corporate Governance

Information with respect to this item is incorporated by reference from our definitive proxy statement (or amendment to this Annual
Report on Form 10-K) to be filed with the SEC within 120 days of the end of the fiscal year ended January 29, 2022.

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accounting Fees and Services

Item 15. Exhibits, Financial Statement Schedules

15(a)(1) Financial Statements

PART IV.

The list of consolidated financial statements and notes required by this Item 15(a)(1) is set forth in the “Index to Consolidated
Financial Statements” on page 33 of this Annual Report.

15(a)(2) Financial Statement Schedules

All schedules have been omitted because the required information is not applicable or is not present in amounts sufficient to require
submission of the schedules, or because the information required is included in the financial statements or notes thereto.

15(a)(3) Exhibits

The list of exhibits required by this Item 15(a)(3) is set forth in the “Index to Exhibits” beginning on page 63 of this Annual Report.

Item 16. Form 10-K Summary

Omitted at registrant’s option.

Exhibits

Index to Exhibits

3.1 Certificate of Amendment to Restated Certificate of Incorporation, effective as of August 6, 2021 (included as

Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed on August 31, 2021, and incorporated herein
by reference).

3.2 Restated Certificate of Incorporation of the Company (conformed copy incorporating all amendments through
August 6, 2021 (included as Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q filed on August 31,
2021, and incorporated herein by reference)

3.3 Fourth Amended and Restated By-Laws (included as Exhibit 3.1 to the Company’s Current Report on Form 8-K

filed on June 18, 2015, and incorporated herein by reference).

4.1 Description of Securities

10.1 Company’s 2006 Incentive Compensation Plan, as amended (included as Exhibit 10.3 to the Company’s Annual
Report on Form 10-K filed March 17, 2014 (File No. 001-34219), and incorporated herein by reference).

10.2 Company’s 2016 Incentive Compensation Plan, as amended (included as Exhibit 10.1 to the Company’s Current

Report on Form 8-K filed August 6, 2021, and incorporated herein by reference).

10.3 Form of Non-Qualified Option Agreement for Associates (included as Exhibit 10.3 to the Company’s Annual

Report on Form 10-K filed March 20, 2017, and incorporated herein by reference).

10.4 Form of Non-Qualified Option Agreement for Associates (pursuant to the Company’s Long-Term Incentive

Plan, as amended) (included as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed August 27,
2020, and incorporated herein by reference).

10.5 Form of Restricted Stock Agreement for Associates (included as Exhibit 10.5 to the Company’s Annual Report

on Form 10-K filed March 20, 2017, and incorporated herein by reference).

10.6 Form of Restricted Stock Agreement for Associates (pursuant to the Company’s Long-Term Incentive Plan)
(included as Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed March 20, 2017, and
incorporated herein by reference).

10.7 Form of Restricted Stock Unit Agreement for Associates (included as Exhibit 10.7 to the Company’s Annual

Report on Form 10-K filed March 20, 2017, and incorporated herein by reference).

10.8 Form of Restricted Stock Unit Agreement for Associates (pursuant to the Company’s Long-Term Incentive Plan)

(included as Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed March 20, 2017, and
incorporated herein by reference).

10.9 Form of Deferred Stock Award Agreement for Non-Employee Directors (included as Exhibit 10.9 to the

Company’s Annual Report on Form 10-K filed March 20, 2017, and incorporated herein by reference).

10.10 Fifth Amended and Restated Non-Employee Director Compensation Plan (included as Exhibit 10.1 to the

Company’s Quarterly Report on Form 10-Q filed November 20, 2020, and incorporated herein by reference).

10.11 Sixth Amended and Restated Non-Employee Director Compensation Plan.

10.12 Credit Agreement dated October 28, 2021, by and among Citizens Bank, N.A., as Administrative Agent and

Collateral Agent, Other Lenders identified therein, the Company, as lead borrower, and the Borrowers and
Guarantors identified therein (included as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on
November 2, 2021, and incorporated herein by reference).

10.13 Seventh Amended and Restated Loan and Security Agreement dated as of May 24, 2018, by and among Bank of

America, N.A., as Administrative Agent and Collateral Agent, the Lenders identified therein, the Company, as
Lead Borrower, the Company and CMRG Apparel, LLC, as Borrowers, and the Guarantors identified therein
(included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 30, 2018, and
incorporated herein by reference).

†

*†

10.14 First Amendment to Seventh Amended and Restated Credit Facility dated as of May 31, 2019, by and among

Bank of America, N.A., as Administrative Agent and Collateral Agent, the Lenders identified therein, the
Company, as Lead Borrower, the Company and CMRG Apparel, LLC, as Borrowers, and the Guarantors
identified therein (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 6, 2019,
and incorporated herein by reference).

10.15 Waiver and Second Amendment to Seventh Amended and Restated Credit Agreement dated as of September 5,
2019, by and among Bank of America, N.A., as Administrative Agent and Collateral Agent, the Lenders
identified therein, the Company, as Lead Borrower, the Company and CMRG Apparel, LLC, as Borrowers, and
the Guarantors identified therein (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed
September 6, 2019, and incorporated herein by reference).

10.16 Third Amendment to Seventh Amended and Restated Credit Agreement dated as of April 15, 2020, by and

among Bank of America, N.A., as Administrative Agent and Collateral Agent, the Lenders identified therein, the
Company, as Lead Borrower, the Company and CMRG Apparel, LLC, as Borrowers, and the Guarantors
identified therein (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 16, 2020,
and incorporated herein by reference).

10.17 Employment Agreement between the Company and Harvey S. Kanter, dated February 19, 2019, which includes

the Form of Performance Share Award Agreement and Form of Discretionary Restricted Stock Unit Award
Agreement (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 20, 2019,
and incorporated herein by reference).

10.18 Second Amended and Restated Employment Agreement between the Company and Peter H. Stratton, Jr. dated

as of November 27, 2017 (included at Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed on
March 23, 2018, and incorporated herein by reference).

10.19 Employment Agreement between the Company and Robert S. Molloy dated as of January 7, 2010 (included as

Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 11, 2010 (File No. 001-34219), and
incorporated herein by reference).

10.20 Employment Agreement between the Company and Francis C. Chane dated as of January 8, 2010 (included as
Exhibit 10.34 to the Company’s Annual Report on Form 10-K filed on March 19, 2010 (File No. 001-34219),
and incorporated herein by reference).

10.21 Employment Agreement between the Company and John F. Cooney dated as of May 17, 2015 (included as
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 27, 2015, and incorporated
herein by reference).

10.22 Employment Agreement between the Company and Anthony J. Gaeta dated as of November 27, 2017 (included

as Exhibit 10.41 to the Company’s Annual Report on Form 10-K filed on March 23, 2018, and incorporated
herein by reference).

10.23 Employment Agreement between the Company and Allison Surette dated as of May 17, 2018 (included as

Exhibit 10.29 to the Company’s Annual Report on Form 10-K filed on March 19, 2020, and incorporated herein
by reference).

10.24 Employment Agreement between the Company and Ujjwal Dhoot dated as of November 19, 2019 (included as

Exhibit 10.30 to the Company’s Annual Report on Form 10-K filed on March 19, 2020, and incorporated herein
by reference).

10.25 Amended Employment Agreement between the Company and Ujjwal Dhoot dated as of August 2, 2020

(included as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 27, 2020, and
incorporated herein by reference).

10.26 Employment Agreement between the Company and Stacey Jones effective February 19, 2021 (included as

Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 27, 2021, and incorporated herein
by reference).

†

10.27 Fourth Amended and Restated Annual Incentive Plan (included as Exhibit 10.1 to the Company’s Current Report

on Form 8-K filed on May 6, 2019, and incorporated herein by reference).

10.28 Second Amended and Restated Long-Term Incentive Plan (included as Exhibit 10.1 to the Company’s Current

Report on Form 8-K filed on June 22, 2018, and incorporated herein by reference).

10.29 First Amendment to the Second Amended and Restated Long-Term Incentive Plan (included as Exhibit 10.1 to

the Company’s Form 10-Q filed on November 30, 2018, and incorporated herein by reference).

10.30 Third Amended and Restated Long-Term Incentive Plan (included as Exhibit 10.1 to the Company’s Current

Report on Form 8-K filed on June 12, 2020, and incorporated herein by reference).

10.31 Letter Agreement, dated January 29, 2014, by and between the Company and Red Mountain Capital Partners

LLC (included as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 17, 2017,
and incorporated herein by reference).

10.32 Letter Agreement, dated April 4, 2018, by and between the Company and Red Mountain Capital Partners LLC
(included as Exhibit 10.38 to the Company’s Annual Report on Form 10-K filed on March 19, 2020, and
incorporated herein by reference).

10.33 Form of Securities Purchase Agreement (included as Exhibit 10.1 to the Company’s Current Report on Form 8-

K/A, filed on February 5, 2021, and incorporated herein by reference).

10.34 Placement Agency Agreement, dated February 5, 2021, between the Company and D.A. Davidson & Co.

(included as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A, filed on February 5, 2021, and
incorporated herein by reference).

10.35 Contribution Agreement dated January 30, 2006 by and among the Company, Spirit SPE Canton, LLC and Spirit

Finance Acquisitions, LLC (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on
February 3, 2006 (File No. 001-34219), and incorporated herein by reference).

10.36 Membership Interest Purchase Agreement dated January 30, 2006 by and between the Company and Spirit

Finance Acquisitions, LLC (included as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on
February 3, 2006 (File No. 001-34219), and incorporated herein by reference).

10.37 Lease Agreement dated February 1, 2006 by and between the Company and Spirit SPE Canton, LLC (included
as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 3, 2006 (File No. 001-34219),
and incorporated herein by reference).

21.1 Subsidiaries of the Registrant.

23.1 Consent of Independent Registered Public Accounting Firm.

31.1 Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities

Exchange Act of 1934.

31.2 Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities

Exchange Act of 1934.

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906

of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906

of the Sarbanes-Oxley Act of 2002.

†

101 The following materials from the Company’s Annual Report on Form 10-K for the year ended January 29, 2022,
formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii)
Consolidated Statements of Operations, (iii) Consolidated Statements of Changes in Stockholders’ Equity
(Deficit), (iv) Consolidated Statements of Comprehensive Income, (v) Consolidated Statements of Cash Flows,
and (vi) Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File – The cover page interactive data file does not appear in the interactive data file

because its XBRL tags are embedded within the Inline XBRL document

*
**
†

Filed herewith.
Portions of this Exhibit have been omitted pursuant to a grant of confidential treatment.
Denotes management contract or compensatory plan or arrangement.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

March 17, 2022

DESTINATION XL GROUP, INC.

By:

/s/ HARVEY S. KANTER
Harvey S. Kanter
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant in the capacities and on the dates indicated.

Signatures

/s/ HARVEY S. KANTER
Harvey S. Kanter

Title

President and Chief Executive Officer (Principal Executive
Officer)

/s/ PETER H. STRATTON, JR.
Peter H. Stratton, Jr.

Executive Vice President, Chief Financial Officer and
Treasurer (Principal Financial Officer)

Date

March 17, 2022

/s/ JOHN F. COONEY
John F. Cooney

/s/ LIONEL F. CONACHER
Lionel F. Conacher

/s/ CARMEN BAUZA
Carmen Bauza

/s/ JACK BOYLE
Jack Boyle

/s/ WILLEM MESDAG
Willem Mesdag

/s/ IVY ROSS
Ivy Ross

/s/ ELAINE RUBIN
Elaine Rubin

Vice President and Managing Director of Finance, Chief
Accounting Officer and Corporate Controller (Principal
Accounting Officer)

Chairman of the Board of Directors

March 17, 2022

Director

A N N U A L
REPORT

2022

Dear Shareholders,

OTHER SHAREHOLDER INFORMATION

While 2021’s results in new customer acquisition and

retention may be admirable, we believe we have far greater

opportunities to be the category leader and a leading retail

brand. We know that DXL solves many of the challenges

faced by the big and tall community when it comes to apparel,

and we are committed to driving awareness and trial of

“The DXL Difference” – our unique fit, assortment, and

experience – to prospective customers on their terms, and

in the channels in which they choose to shop. Furthermore,

we are investing in new platforms and technologies in

2022 – including an all-new loyalty program and customer

data platform – to unlock profoundly deeper levels of

engagement and personalization across all DXL channels,

as well as establishing renewed commitments within the

environmental, social, and governance arenas. These

investments and initiatives are indicative of DXL’s commitment

to driving customer acquisition and repeat purchases, while

simultaneously enhancing the overall customer experience

that is at the heart of all that we do.

As we again acknowledge the work and employee efforts

that drove 2021 results, we want to further emphasize the

immense opportunities that lie ahead. Over the past two

years, DXL has defined a clear path and remains committed

to the combination of discipline and initiative that has yielded

recent results. Meaningful market share and growth prospects

exist both within DXL’s current core markets and additional big

and tall consumer segments – for which we have planned and

are prepared to aggressively pursue in 2022 and beyond.

Thank you for your time, interest, and support of DXL – it is

truly appreciated.

Sincerely,

Harvey S. Kanter
President and Chief Executive Officer

Ivy Ross
VP Google Hardware Design

Willem Mesdag
Managing Partner of Red Mountain
Capital Partners, LLC

Elaine K. Rubin
President of Digital Prophets
Network, LLC

BOARD OF DIRECTORS

Lionel F. Conacher
Chairman of the Board

Carmen R. Bauza
Director

Jack Boyle
Global Co-President, Direct
to Consumer of Fanatics, Inc.

EXECUTIVE OFFICER

Harvey S. Kanter
President and Chief Executive Officer

SENIOR MANAGEMENT

Francis C. Chane
Senior Vice President,
Supply Chain and Customer Fulfillment

John F. Cooney
Senior Vice President, Finance, Chief
Accounting Officer & Corporate Controller

Ujjwal Dhoot
Chief Marketing Officer

Anthony J. Gaeta
Chief Stores Officer

Stacey A. Jones
Chief Human Resources Officer

Robert S. Molloy
General Counsel and Secretary

Peter H. Stratton, Jr.
Executive Vice President,
Chief Financial Officer and Treasurer

Allison Surette
Chief Merchandising Officer

CORPORATE OFFICES

555 Turnpike Street
Canton, Massachusetts 02021
781.828.9300

FINANCIAL INFORMATION

Requests for financial information should be directed to our Investor Relations Department at our headquarters:
Destination XL Group, Inc., 555 Turnpike Street, Canton, Massachusetts, 02021, by calling 781.828.9300 or emailing
us at investor.relations@dxlg.com. You may also visit our website at https://investor.dxl.com. A copy of our Annual Report
on Form 10-K for the fiscal year ended January 29, 2022, filed with the Securities and Exchange Commission, may be
obtained without charge upon request to the Investor Relations Department.

ANNUAL MEETING

Our 2022 Annual Meeting of Stockholders will be held on August 4, 2022.

TRANSFER AGENT AND REGISTRAR

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Inquiries regarding stock transfer requirements, address
changes and lost stock certificates should be directed to:
American Stock Transfer & Trust Company LLC
6201 15th Avenue
Brooklyn, New York 11219
800-937-5449/718-921-8200, ext. 4801 • www.astfinancial.com

KPMG LLP
Two Financial Center
60 South Street
Boston, Massachusetts 02111

This Annual Report contains forward-looking statements within the meaning of the federal securities laws. You can identify these forward-looking
statements by our use of the words “believes,” “anticipates,” “plans,” “expects,” “may,” “will,” “intends,” “estimates,” and similar expressions,
whether in the negative or in the affirmative. Although we believe that these forward-looking statements reasonably reflect our plans, intentions
and expectations, our actual results could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements
we make. We have included important factors in the cautionary statements under the heading “Risk Factors” under Item 1A of our Form 10-K
for the year ended January 29, 2022, that we believe could cause our actual results to differ materially from the forward-looking statements
that we make. Forward-looking statements contained in this Annual Report speak only as of the date of this report. Subsequent events or
circumstances occurring after such date may render these incomplete or out of date. We undertake no obligation and expressly disclaim any
duty to update such statements.

Destination XL Group, Inc.

555 Turnpike St. Canton, MA 02021

781.828.9300

DXL.COM

Empowering the Big + Tall man

to look good + feel good

A N N U A L R E P O R T 2022