J.C. Penney (OTC:JCPN.Q) closed the third quarter with $8.69 billion in assets and $8.69 billion in liabilities. That puts the company in a very tough position, as it lacks the cash needed to make a major transformation.

Its one hope -- albeit an improbable one  -- was that the holiday season would create some cash for the company. People spend a lot of money between Thanksgiving and the end of the year, and that could have provided a boost for the struggling retailer.

But that was a pipe dream for company executives and shareholders from the beginning. As you might imagine, there was no Christmas miracle for J.C. Penney. The company got coal in its stocking, and its holiday season results suggest it may not live to see another Thanksgiving.

The exterior of a J.C. Penney store

J.C. Penney had very poor holiday results. Image source: J.C. Penney.

How bad was it for J.C. Penney?

At a time of the year when Americans open their wallets -- often in irrational ways -- few chose to do that at J.C. Penney. The company saw comparable-store sales drop by 7.5% for the nine-week period ending Jan. 4. If you exclude the fact that the retailer exited the appliance and furniture categories, comp sales dropped by "only" 5.3%.

For the full year, the company expects same-store sales to drop by 7%-8%. That number improves compared to a loss of 5%-6% if you exclude the company dropping appliances and furniture.

Those are dismal results that show that the company has lost its connection with consumers. CEO Jill Soltau understands how dire the situation is -- and she has some good ideas about how to change things -- but she lacks the cash to make meaningful changes.

J.C. Penney closed the third quarter with $157 million in cash on hand. It's likely that the total dropped after the chain's poor holiday performance. It's simply not possible to make major changes when you have no money.

Soltau took an upbeat tone in her remarks in the company's third-quarter earnings release, however, and those remarks gave shareholders hope heading into the fourth quarter.

"We are beginning to see results -- both in our numbers and how we operate as a business -- from the early implementation of our Plan for Renewal, which is focused on driving traffic, offering compelling merchandise, providing an engaging experience, fueling growth, and building a results-minded culture," she said late this week. "Going forward, I am confident that delivering our strategy, coupled with our ongoing discipline and commitment to improving the foundational elements of our business, will return JCPenney to its rightful place in the retail industry."

That sounds nice, but it's not reflective of what's actually happening with the company. You can't win in retail without customers, and J.C. Penney has chased away too many of its customer base to turn things around.

What's next for J.C. Penney?

Soltau will continue to make positive statements because that's what CEOs do when facing disaster. She needs vendors to keep supplying her company, and she wants banks to keep loaning J.C. Penney money.

The problem -- and it's a major one -- is that the retailer has become irrelevant to shoppers. If customers stayed away during the holidays, it's hard to picture them coming back during the slower winter season.

J.C. Penney needs a major reinvention. Soltau has solid ideas as to how to do that, but plans require money, and her chain has essentially none of that.

Call it a slow death or a managed shutdown, but there's no future for J.C. Penney. It's hard to picture a deep-pocketed savior stepping up to pay the billions needed to give the company a chance. Barring that, the only question is how long the company will survive.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.