If you thought J.C. Penney (JCPN.Q) had enough cash to help it turn the corner back to profitability, think again.

Apparently, less than four months after securing a $2.25 billion five-year term loan with Goldman Sachs, various reports have surfaced saying the struggling retailer is in early talks with banks and institutional investors to raise more capital to finance its increasingly expensive turnaround plans.

Out of the frying pan...
For those of you keeping track, remember that $2.25 billion loan itself actually represented a $500 million increase over the $1.75 billion the company had originally announced in late April. At the time, management even stated the $1.75 billion, when combined with its existing $1.85 billion revolving credit facility, would give it "the financial strength [it] need[s] to meet [its] current funding requirements and build toward a successful future."

As I pointed out when it finalized the increased loan in May, however, $1.75 billion simply wouldn't have been adequate considering it could have provided just barely enough to replace J.C. Penney's remaining line of credit while offsetting its operating losses for the remainder of 2013. The extra $500 million, I wrote, would at least have given the company "a bit more wiggle room if it continues losing money after that point."

... and into the fire
Curiously enough, already-low expectations helped lift shares of J.C. Penney 6% in a single day last month after it announced weak second-quarter results, including sales that fell 11.9% to $2.66 billion and a quarterly net loss of $586 million.

And even though J.C. Penney received a $2.18 billion cash boost from its last loan, it was only left with $1.535 billion in cash and equivalents remaining at the end of the quarter.

So where did the rest go? Look no further than a $357 million inventory increase "required to restock basic items," $439 million in capital expenditures, and $355 million to repurchase debt.

Meanwhile, J.C. Penney's competitors have continued to thrive.

Take Macy's (M -1.52%) for example, which grew earnings per diluted share by 7.5% last quarter, despite a 0.8% decrease in both overall and comparable sales. Still, Macy's also forecast comparable-sales growth for the remainder of 2013 in the range of 2.5% to 4%, and used $446.7 million of its more than $1.8 billion cash pile to repurchase 9.2 million shares of common stock in the second quarter alone.

Nordstrom (JWN -2.33%) fared even better, enjoying a 4.2% increase in same-store sales. This, in turn translated to a 6.4% increase in total sales and a 24% boost in earnings per share. Like Macy's, Nordstrom also repurchased some of its own common stock, spending $48 million to reabsorb 0.8 million shares, and still has a total of $979 million remaining under its existing repurchase agreement for share buybacks going forward.

Worse yet for J.C. Penney, that's not to mention the fact both Macy's and Nordstrom currently offer dividends yielding 2.2%.

Foolish takeaway
Of course, this latest money grab by J.C. Penney could also represent a prudent move by management to grab more cash while interest rates remain low -- a "just in case" kind of measure, if you will.

Unfortunately, that would still show a lack of confidence in J.C. Penney's faltering business given the $1.5 billion it still has in the bank, so the news seems more a lose-lose than anything for J.C. Penney shareholders.

In the end, that's why I'm still convinced investors would be wise to avoid riding J.C. Penney downward until it's too late. Instead, if you absolutely insist on finding another comparable retail play, consider putting your money to work with the competition.