"The store was not meeting our objective for profitability," said company spokesman Quinton Crenshaw.

Although it was a tough decision, the company had to make it, he said.

"We've been monitoring the store's performance for more than a year now," he explained. "And we don't foresee conditions improving in the near future."

Although several businesses and stores in Sunnyvale have closed their doors in the past few months, JCPenney will be the first national department store in the city to do so. Trudi Ryan, planning officer for the city, said the news is not as negative as it might seem.

"This is not a bad thing—not great, but not bad, either," Ryan said.

The closure will create opportunities for other businesses to move into the downtown area, she explained. Ryan added that several large retail outlets, including Barnes & Noble and Old Navy, have expressed interest in the downtown area.

The mall houses other specialty stores and smaller retail businesses. The two remaining national chain stores—Macys and Target—are on either side of the mall. JCPenney owns its space, and the company is free to sell the building to whoever it wants to, Ryan said.

The mall has been facing its own crisis over the last few years. Several stores within the mall have closed down, and business is sparse.

"People hated it from the time it was built," said Suzi Blackman, president and CEO of the Sunnyvale Chamber of Commerce. "It's a white elephant now."

Currently, the city is working on a downtown conceptual plan that calls for restructuring the mall and extending McKinley and Murphy avenues through the area that is currently enclosed, making it more pedestrian-friendly, Ryan said.

The city held two public outreach meetings to gain input and hear concerns about the plan, which is currently in the environmental impact report stage. The city hopes to capitalize on the success of Murphy Avenue by creating a similar type of shopping and dining area in the mall's current location.

"If, for some reason, there are only two major retail stores in the mall, it could still be a successful shopping center," Ryan said.

The JCPenney store, which has been at the mall since Oct. 7, 1992, will remain open during the holidays and close down officially on Jan. 18, Crenshaw said. It will be business as usual until then, he said. However, the store will look into liquidation sales to move out its inventory, he said.

When the downtown JCPenney closes, its customers can still return merchandise at the other JCPenney stores in the Bay Area, Blackman said.