The Decline of Palais Royal. What Happened? 10 Marketing Tips

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The Decline of Palais Royal. What Happened? 10 Marketing Tips

Palais Royal joined the ever-growing list of retailers falling by the wayside due to the coronavirus pandemic as discussed over at and, when its parent company, Stage Stores Inc., filed for Chapter 11 bankruptcy in early May. The company was already in trouble even before COVID-19, and this article will look to highlight some of the factors behind its decline which go to explain what happened to the company.

The decline in shopping malls

Palais Royal stores were located malls in small towns and rural areas in the country, and that was one of the reasons behind the company’s decline. This is because, as discussed over at and, the lower and mid-tier shopping malls located in these areas have been in decline for years now, as consumers increasingly blank them. This has led to decreasing foot traffic which has led to a reduction of sales and earnings in the company’s stores, which is one of the key factors contributing to its decline and eventual filing for bankruptcy.

Growth of online retail

Another key factor that has contributed to the decline of Palais Royal is the growth of online retail, which has seen Americans increasingly shopping online instead of at brick-and-mortar stores, a problem only made worse for the company as a result of the coronavirus pandemic as discussed over at With most of its consumer base shopping online, the company lost foot traffic into its stores, leading to reduced sales and eventual decline.

Competition from discounters

Palais Royal has also come under heavy pressure due to competition from discounters such as T.J. Maxx, among others covered over at, which is one of the factors that also contributed to its decline. The chain was unable to compete with the heavily discounted prices offered at its competitors, which was one of the key reasons that saw its parent company, Stage Stores, convert all of its department stores, including Palais Royal stores, into Gordmans locations; to enable them to compete with discounters.

Consumers are more conscious

Department stores like Palais Royal have not only had to grapple with the rise in online retail but also because consumers are more conscious and savvier as discussed over at Consumers now compare prices and also have more options available to them when looking to make a purchase. They are, therefore, looking for the best deals, which is why department stores have been losing out to off-price stores, and why Palais Royal, through its parent company decided to get into the off-price sector.

Too much focus on promotional selling

Palais Royal, like many retailers in their position faced with new competitors and issues, also opted to shift their focus to heavy promotional selling, as explained over at This, while providing a quick fix that brought in new customers into the company’s stores, also had an adverse effect of cheapening their brand. The marketing tip to learn here is that you should use promotional selling as one of the tools at your disposal and not as the only one, or the major one.

Generational shift

Palais Royal also fell foul of the generational shift that has seen millennials take over as one of the key consumer demographics, as covered over at Palais Royal, therefore, needed to take more risks with their marketing and branding to be attractive to and to get more millennials into its stores, which they failed. Its competitors didn’t make such mistakes and benefited, leaving Palais Royal in the dust, in yet another factor that contributed to the company’s decline and eventual filing of bankruptcy.

Poor in-store experience

To attract customers to your brick-and-mortar store, the experts over at explain that you need to make shopping at your stores an exciting experience and not a chore. This is another area where Palais Royal failed, as the in-store experience in its stores was poor and didn’t inspire customers to want to come in. The company needed to offer an experience through its atmosphere and customer service, but didn’t, and got swept aside by its competitors, eventually leading to its decline and eventual filing for chapter 11.

Too many stores

In the height of the mall’s popularity, Palais Royal, and Stage Stores in general acquired too many stores, to the extent that the parent company had over 700 stores as discussed over at This overbuilding and over-acquisition became a problem when the mall’s popularity begun to dwindle, leaving the company with many underperforming stores, with high operational costs and rent, and very little sales due to declining foot traffic. This is one of the main reasons that contributed to the company’s decline.

Changes in consumer spending

In recent years, as is discussed in detail over at, consumer spending has pivoted away from spending money on apparel to spending on technology and gadgets such as smartphones among others. This is yet another factor that contributed to the decline of Palais Royal, as though rural America needed affordable clothing, people weren’t spending that much on their wardrobe. This affected the company’s sales, leading to dwindling earnings, which eventually resulted in the company filing for bankruptcy.

Crippling debt

By the time Stage Stores, Palais Royal’s parent company was filing for bankruptcy, it owed creditors up to $1 billion, as is outlined over at The debt burden was too much for the company to bear, and is one of the reasons that contributed to its decline. Most of it was as a result of the company looking to pivot into the off-price sector when it bought Gordmans which had just gone into bankruptcy itself. While this may have helped the company stabilize and bounce back in recent times, it also shackled it with high levels of debt that eventually proved too heavy a burden to bear.

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