Specialty retailer J. Jill (NASDAQ:JILL) is going to miss its mark. Despite a reasonable 4.7% uptick in comps for its September quarter, the apparel chain is going to post a loss of $0.12 to $0.14 per share for the period. That's because J. Jill grew its same-store sales by cutting prices to clear out inventory. That makes the top line look decent, in volume, but margins get squeezed like a walnut over the holidays.

You also have a company that is moving away from the higher-margin direct-mail catalog business and committing itself to growing at the mall level. Yes, sales are inching higher, but today's dollars just aren't working as hard as their predecessors.

J. Jill toils in a potentially lucrative niche, targeting women over 35 who are looking for smart casual and workplace wear. The problem is that J. Jill isn't the only mallrat standout looking to stock closets with camisoles and sundresses. It competes against Chico's (NYSE:CHS), Ann Taylor's (NYSE:ANN) Loft, and to a lesser extent against slightly older-skewing chains like Talbot's (NYSE:TLB) and Coldwater Creek (NASDAQ:CWTR).

In August, J. Jill was rumored to be in the acquisitive sights of Urban Outfitters (NASDAQ:URBN). It didn't happen. J. Jill remains every inch the bachelorette. That doesn't mean that it wouldn't mind getting hitched. If anything, it takes on a new level of urgency. This year has been a frustrating one in terms of banged-up profit margins, and it comes on the heels of a rather lackluster showing last year.

There was hope that this would be the turnaround quarter, after the company had reported a loss of $0.13 per share during last year's third quarter. Wall Street was looking for a deficit of just $0.02 per share. The recovery would have situated the company well going into the critical holiday shopping season (even though the company's strongest quarter has been the June quarter over the past three years).

It's not going to happen. As other established retailers like Motley Fool Stock Advisor recommendation Gap (NYSE:GPS) ponder entering this niche, it's going to get even more crowded. The only things that J. Jill should be discounting these days are its chances.

Longtime Fool contributor Rick Munarriz loves shopping by catalog -- as long as he can find a parking space. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.