If all of you New York & Co. (NYSE:NWY) shareholders out there didn't channel Homer Simpson yet today, allow me to give you another bonk.

Today's August sales report was stank. Bad. Not so good. Total sales were down 5.9% from the prior-year period, and comps put in an especially dismal 13.4% decrease. Management's statement today said that the company basically expected comps to be negative because of a few factors -- the reschedule of a key promotion, disappointing denim sales of some kind, and the failure of a "semi-annual pant event."

Allow me to be blunt. This is a Motley Fool Hidden Gems pick, and I own shares of this stock because I liked the turnaround story: As operational efficiency picked up, profits would follow, and certain refinancing costs were masking the profitability from those who weren't paying pretty close attention. In other words, I didn't buy New York & Co. looking for a top-line sizzler. We're not talking about serial same-store-sales slugger Chico'sFAS (NYSE:CHS). But neither did I expect to see sales so sluggish.

Can we attribute New York & Co.'s crummy August to an overall retail slump? I don't think so. Sure, Limited Brands (NYSE:LTD) had negative comps, too, as did Stock Advisor recommendation Gap (NYSE:GPS). But Ann Taylor (NYSE:ANN) posted a modest increase, so we know that sales growth in this space is possible, if you offer your customers what they want.

I've often explained that this kind of scrutiny and volatility is both the attraction and the risk of retail fashion investing. Every month, there's a chance for the Street to get it wrong or overreact. (That's good for long-term buyers.) But every month, there's a chance for the company to prove that it's not getting the job done, and I'd argue that New York & Co. isn't getting it done right now.

As I pointed out in a Take discussing last quarter's results, the latest inventory levels look far too bloated for me, and after this kind of August, I expect it to look even worse in the future. And when you need to move extra merchandise, it usually means dropping prices, which echoes throughout the income statement down to the bottom line.

I'm still in wait-and-see mode with New York & Co., but come December, I'd better see something more satisfying than plausible-sounding excuses. Frankly, there are too many retailers out there that are chugging along nicely for me to cling forever to a turnaround story that's not turning around.

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Seth Jayson knows it's a crazy ride in the fashion patch. At the time of publication, he had shares of New York & Co. View his stock holdings and Fool profile here. Fool rules are here.