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J.C. Penney Fans In San Fernando Livid Over Store Closing

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SAN FERNANDO JC PENNEY
Julian Ruelas stands with other protestors trying to keep a J.C. Penney in San Fernando, Calif., open on Monday, July 30, 2012. Courtesy of Save San Fernando J.C. Penney | Save San Fernando JCPenney

As new J.C. Penney CEO Ron Johnson courts the cool, elusive city shopper, one town is playing the role of an angry ex.

"J.C. Penney, here again you slap us in the face," declared Antonio Lopez, mayor pro tem of San Fernando, Calif., in a video filmed early Monday morning outside his city's shuttered outlet. "This is very unacceptable from you."

On Saturday, the day the San Fernando store closed, residents showed up to protest once more. After J.C. Penney announced the bad news a month ago, locals tried rallies, petitions and concerts to no avail. The store, with its geometric facade and retro neon sign, had been serving shoppers since 1953 in downtown San Fernando, a city of 24,000 in Southern California's San Fernando Valley. It is one of two J.C. Penney stores -- the other is in Scottsbluff, Neb. -- to close this year.

Elsewhere, J.C. Penney is garnering more attention for the debut of its "shops" concept this week. On Wednesday, the company opened branded Levi's, Arizona Jeans and i Jeans by Buffalo spaces within 700 of its stores. If all goes according to plan, J.C. Penney will eventually recruit 100 brands to open such mini-boutiques, transforming cluttered department stores into modern "main streets" with myriad shopping experiences. The company will also eliminate cash registers, arming staff with iPads and other mobile devices to check out customers.

But J.C. Penney is transforming only its best 700 stores. The remaining 400, mostly located in small towns, will receive limited selections of new merchandise. Although the company built its empire on small-town America, many of those stores are becoming burdens as the company attempts to rebrand. Some loyal shoppers at those locations are also frustrated by the edgier fashion and end of coupons, two changes that Johnson has implemented since starting at J.C. Penney in November. In the early months of the rebrand, sales at J.C. Penney stores open at least a year declined 18.9 percent.

San Fernando residents would have embraced the new J.C. Penney if given a chance, according to Julian Ruelas, 32, a real estate project manager who helped organize the store rallies. "They are missing an opportunity. We're fashionable. We're tech-savvy," he said. "I think they pigeonholed us as some immigrant community."

San Fernando is 92.5 percent Hispanic, a working class community with a median income of $49,716, slightly higher than in the surrounding city of Los Angeles, according to Census data. While it's part of the Los Angeles metropolitan area and the famed "Valley," San Fernando's central downtown and nearly homogenous population separates it from surrounding areas, according to Ruelas. Save for J.C. Penney, few chain stores operate in San Fernando. To reach the closest mall, residents have to drive 11 miles (or 20 minutes without traffic), said Ruelas.

Like many other California cities, San Fernando is also struggling to stretch funds. Sales tax revenue has declined 6 percent in the past year, if projections made in the city's 2011-2012 budget are right.

"It's never an easy decision to close a store," wrote Joey Thomas, a J.C. Penney spokesman, in an email to The Huffington Post. "We would not have moved forward with this difficult decision if we did not believe it was absolutely necessary for the future growth of our company." He did not say whether the San Fernando store was underperforming.

The location wasn't J.C. Penney's fanciest. Its narrow selection of merchandise and minuscule makeup counter contrasted sharply with J.C. Penney's newer stores, 325 of which have Sephora boutiques, the predecessors to the new "shops" concept. The rarely renovated San Fernando building, owned by a local businessman, may now become a "historic resource" if the city's Preservation and Planning Committee approves the application this month.

Late Sunday night, one day after the store closed, two contractors who said they worked for J.C. Penney tried to remove the vintage neon sign from the building. A crowd of people, including the mayor, showed up to stop them. "Now you want to take history from the city," said an angry Mayor Lopez in the video. J.C. Penney would not confirm whether it had hired the contractors.

As of Wednesday, 1,500 people had signed an online petition to keep the store open. About a hundred people attended Saturday's protest and another 50 came to a press conference about the sign on Monday, according to Ruelas.

Retail analysts predict that J.C. Penney may be forced to close more stores in the future. "Four hundred stores are in markets that are no longer growing," said Michael Binetti, an analyst at UBS. "I don't think those stores and those customers will respond to significantly refreshed in-store experience and quicker fashion."

Thirty-five percent of J.C. Penney's locations are in markets with populations of less than 500,000, a much higher rate than any of the company's competitors, according to Binetti.

The renovations that just debuted haven't been entirely well received either. "This weekend's view of a few (and admittedly small sample) [of shops] was not encouraging," wrote Michael Exstein, an analyst at Credit Suisse, in a note to clients. Shares of J.C. Penney, priced at $21.02 late Wednesday, have dropped 38.6 percent since Jan. 26, the day after the CEO unveiled his new strategy.

Residents of San Fernando, meanwhile, have nothing but praise for the brand many consider too dowdy to save. "It's a wonderful store that harkens back to what JC Penney's used to stand for," wrote Tisha Parti-Smith on the petition to save the local store. "It is much more than a store, it is a part of home," wrote Joanie Camacho.

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