Photo by Astrid Stawiarz/Getty Images for JC Penney 
 
 J.C. Penney, the storied if unglamorous retailer, is in trouble. Big trouble. Fourth-quarter earnings results came out on Wednesday and they were terrible. The bad news starts with a quarterly loss of $427 million, but it doesn’t end there. Comparable store sales—meaning stores that were open this past quarter and also open in the same quarter of the previous year—fell by a mind-boggling 32 percent. Henry Blodget says it may have been the worst quarter posted by any retailer ever. 
 
 It wasn’t supposed to be this way. J.C. Penney made a big splash in the retail world by hiring Ron Johnson, mastermind of Apple’s retail operations, as CEO. He immediately set about to reorganize the stores, and imported Apple concepts, most notably a “no discounting” policy geared around convincing customers that the everyday price is a great price. The results seemed to speak for themselves, but I was curious. After all, I’ve never given the “new” J.C. Penney a try. Perhaps Johnson is a visionary genius who’s reinvented the department store, and the world just isn’t ready for him. Perhaps he’s the victim of bad luck. Perhaps shareholders just need to hold on and have faith. 
 
 So I took the Metro to the Maryland suburbs for a visit to the J.C. Penney in the Wheaton Plaza Mall to see if Johnson really is reviving the legendary chain. There is no evidence that Johnson has remade much of anything. Everything that I always find alienating and unpleasant about the basic department store experience is still there. The store is too big and too disorganized. Products are sometimes clustered by functional category and sometimes by brand, with a confusing mix of house brands and real ones. Right at the door a sign invites you to enjoy free Wi-Fi throughout the store, which really is a change. But why would you want that? There’s no place to sit in the store and no synergy between laptop use and shopping there. Just for kicks, I had my iPhone hop on the Wi-Fi network only to discover that the connection speeds were noticeably slower than Verizon LTE. 
 
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 Nobody was ever driven into bankruptcy by unreliable Wi-Fi, but that’s the Ron Johnson Era in a nutshell. Instead of building on what the people who like J.C. Penney liked about J.C. Penney, he undertook a series of essentially arbitrary changes that alienated some without drawing anyone new in. 
 
 His now-infamous effort to wean consumers off their addiction to discounts by banning sales and coupons in favor of “fair and square” everyday pricing is a case in point. No major retailer works this way. Frequent discounting is an effective tool of price discrimination—the thrifty pay less, the careless or rushed pay more—that lets retailers maximize the value of their fixed real estate investments. Not discounting works for Apple because products become obsolete long before they stop working. Thrifty customers simply upgrade less aggressively. J.C. Penney customers hated the new arrangement, and not surprisingly Johnson started backing down. But now he has the worst of both worlds. For a no-discounting policy to succeed, it has to be credible. But lurking amid the signs touting the fair-and-square policy I saw a “limited time only” 25 percent discount on Stafford work clothes and various items marked “clearance.” 
 
 A policy initially designed to imply that competitors were duping their customers has become the reverse. Here was J.C. Penney explicitly telling you that the list price is the real price and you shouldn’t expect discounts, then down the aisle—discounts! 
 
 At best you could say that Johnson, who used to work for Target, has succeeded in making the stores a bit more like Target. He’s brought in Target-style special collections like the Cosabella Amore line of lingerie (oddly placed on the floor with children’s clothes rather than near apparel for grown women) and launched advertisements that seem geared to a cooler, younger, more urban audience than J.C. Penney’s traditional client base of somewhat square, lower-middle-class moms. 
 
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 But to what end? There’s already a Target and an H&M in the same mall for those seeking a slightly hipper experience. Meanwhile, value-conscious and practicality-oriented moms have hardly vanished from the planet. If anything, the economic difficulties of the past few years mean there are more of them. 
 
 Given the scant number of shoppers, it made some sense for the Wheaton store to have few staff on hand. But low staffing levels plus expansive floor space meant it was impossible to find help. The only salesperson I encountered was in the small prescription glasses section, tucked away behind the kids’ clothes, past the lingerie. I wandered into a fitting room where I found a janitor who was able to direct me to a men’s room. As part of rebranding, signs encouraged me to shop at JCP.com (which just redirects to the old jcpenney.com URL) and then for some reason pick up my item at any register—but it wasn’t clear where any staffed registers might be. 

 Astrid Stawiarz/Getty Images 
 
 Even those who have gotten used to following the ongoing train wreck that is JC Penney were shocked yesterday when the company's Q4 results came out. 
 
 The numbers were abysmal, with JC Penney's same-store sales--the level of sales made by stores that have been operating for at least a year--dropping a staggering 32%. 
 
 On the ensuing conference call, JC Penney's new CEO Ron Johnson took responsibility for the mistakes JC Penney has made, but he discussed the results as if the company were merely in the midst of a big transformation that will soon be complete. 
 
 Whether JC Penney eventually completes the transformation that Ron Johnson has embarked on remains to be seen. 
 
 But after a year of horrific results, one thing is clear: 
 
 So far, this "transformation" is only a "transformation" in the way that the demolition of a building is a "transformation." 
 
 To reiterate: JC Penney's same-store sales dropped by nearly a third year over year. 
 
 A third! 
 
 That means that a store that sold, say, $100 million of stuff in 2011 only sold ~$70 million in 2012. 
 
 It will not surprise you to learn that highly price-competitive retail stores do not operate at profit margins that can handle that sort of revenue drop. 
 
 Retail stores have enormous fixed costs--rent, inventory, people--and they usually operate at very thin profit margins. 
 
 As a result, with even a much smaller revenue drop, stores that might contribute meaningful operating profit to a retail chain suddenly become money-losing lead weights. 
 
 And when a company has finite resources, the way JC Penney does, these stores cannot remain money-losing lead weights for long, or else the company will go bankrupt. 
 
 So Ron Johnson does not have much more time to complete (or at least radically change the direction of) his "transformation" before JC Penney joins legions of other once-powerful retailers in bankruptcy. 
 
 But that's not the only observation about the quarter that JC Penney just reported that's important to make. 
 
 Here's another: 
 
 It is possible that JC Penney just reported the worst same-store sales decline of a major retailer in industry history. 
 
 Retail chains simply do not report results like this unless they are in deep distress. 
 
 They can't report results like this, because they can't survive if they do. 
 
 I am far from an expert in retail, but I cannot remember any other major retailer ever reporting a same-store sales decline that was anywhere close to this. 
 
 Can you? 
 
 Or can we make it official that JC Penney just delivered the worst quarter in retail history? 
 
 SEE ALSO: INSIDE JCPENNEY: Widespread Fear, Frustration, And Distrust With Ron Johnson And His Management Team 
 
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– JCPenney reported earnings this week that were so bad they boggle the mind, writes Matthew Yglesias in Slate. (Maybe the worst ever in retail?) The chain has been struggling to reinvent itself under the vision of Apple retail guru Ron Johnson, and Yglesias decided to visit a store himself to see if the bad press was exaggerated. Unfortunately not, he writes. Johnson has managed to drive away the chain's faithful customers of old—"somewhat square, lower-middle-class moms"—without bringing in new clientele. Take the idea of doing away with sales. It's proven to be a bust, and JCPenney has had to backtrack with a return to "clearance" pricing. "A policy initially designed to imply that competitors were duping their customers has become the reverse," writes Yglesias. "Here was JCPenney explicitly telling you that the list price is the real price and you shouldn’t expect discounts, then down the aisle—discounts!" At best, Johnson has managed to make JCPenney a little more like Target in its bid for hipper shoppers. Trouble is, Target is better at being Target. Meanwhile, JCPenney's old clientele base has only expanded in the lousy economy, and they're going elsewhere. Click for the full column.