Old-fashioned store points up Penney's problems.

A waft of hairspray is detected upon entering the J.C. Penney store in Downey. It's coming from the beauty salon, painted pink with '60s-style salon chairs, where four or five elderly women are being coiffed. Walk a little further and an in-house optometrist sits empty.

In the cosmetics department, the brands of makeup read like something out of a 30-year-old issue of Harper's Bazaar: White Shoulders, Nina Ricci and Charles of the Ritz signs highlight the available lines.

The 40-year-old Penney's store is a throwback to when shopping was a leisure activity rather than a quick fix, when women seldom worked for a living and a hairdo and manicure could be fit into a 10-hour day of guilt-free shopping.

Unfortunately for J.C. Penney, time has stood still at many of its stores, and it's paying a hefty price.

Last week, after ending a less-than-spectacular year with poor holiday sales, J.C. Penney Co. announced it is closing 75 stores, and eliminating 4,900 jobs. Penney's same-store sales slipped 2.3 percent in December, while most other retailers saw gains.

Penney officials said it will be closing the first 18 stores in the next few months, though none of those slated to close are in California.

The 75 stores also don't include the Santa Monica location that dosed its doors two weeks ago. Like its soon-to-be-shuttered counterparts, it did "not meet performance plans and expectations," said Penney spokeswoman Stephanie Brown.

Analysts say the Plano, Texas-based chain is not meeting the expectations of consumers. Part of the problem, they say, is that it is stuck in a time warp.

"J.C. Penney was built at a time when you had a housewife who had all day to stroll around and buy something for herself and her children and her husband," said Scott Kohno, president and chief executive at C & J Partners Inc., a retail consulting finn in Pasadena. "Those stores are archaic, but they are still around."

The store in Downey's Stonewood Mall seems emblematic of the problem. Built in 1958, it has seen few renovations over the years.

It is a two-floor box with old-fashioned decor and displays. In the teen department, clusters of TV monitors descend from the acoustic-tile ceilings that were popular decades ago. Mirrored pillars brash against cluttered clothes racks that spill into the aisles.

At the bed and bath section, Penney's signature-line bubble baths and lotions, packaged in pastel-colored bottles with flashy gold lids, clash with the aromatherapy products, in simple white and brushed-chrome packaging.

Penney officials concede that the entire chain could use an upgrade.

"We have to change the way we do business and take it to the year 2000," said Brown.

Though Brown would not discuss any specific merchandising or brand-building plans, she said Penney's is working on "streamlining product and catalog operations." In other words, cutting out products and services that are not productive.

Some analysts wonder whether that will be enough.

"Their numbers this season were terrible and they had (same-store) decreases ... they have to do something drastic," said Richard Giss, an analyst with Deloitte & Touche LLP.

Giss points to one of Penney's competitors, Sears, Roebuck & Co., which not long ago faced similar problems - outdated merchandising and slow reactions to market trends. Sears made an abrupt about-face, dumping its catalog and reinvigorating its image to appeal to women with its "Softer Side of Sears" advertising campaign.

"Sears realized they had to make themselves relevant in today's market, as does J.C. Penney," said Giss.

Kohno agrees, but what works for one retailer may not necessarily work for another, he said.

Kohno believes Penney needs to focus in on a key customer demographic, preferably young families. Marketing campaigns should reintroduce them to Penney's private labels - Hunt Club (a Ralph Lauren knockoff), Arizona denim clothing for men and the sportswear line St. John's Bay. According to Penney officials, the private-label merchandise accounts for 45 percent of the chain's apparel sales.

"I would focus on one particular customer and build the entire store around that customer." said Kohno. "It's very, very risky, but it's focused."

Some Penney customers say they-keep coming back to the chain because of convenience. Many say they only shop at the stores during clearance sales - when it's more competitive with discounters.

"I shop at Ross and Marshalls and I could get the rome quality there," said Lisa Kidwell, who was shopping last week at the Downey store. "I came here because I have a Penney credit card that and the clearance sales, they have great clearance sales."

Another Penney shopper, 74-year-old Alfred Flores, also came for a sale. "I bought a pair of pants for $21, that's a good deal," Flores said.

Meanwhile, back in the catalog department, Jon Barnhart and his 9-year-old son were picking up an order.

"The T-shirts and underwear are why I come here," said Barnhart.

Experts agree that Penney faces a tough road ahead, but merchandise changes and new product mix could take it out of its slump.

"Look at Target, in a sense that is a department store, it offers much of the same things ... it's a fun shopping experience," said Kohno. "There is no reason (Penney) can't create something more."