Bakers Footwear (NASDAQ:BKRS) posted a first-quarter drop in sales and an earnings loss. The weak results should come as no surprise, though; the shoe retailer has been struggling for at least five straight quarters now. What is surprising is management's inability to find the right mix of merchandise to turn itself around.

Overall quarterly sales only fell 1% to $49.3 million, as Bakers opened six new stores. But same-store sales plummeted 9.3% as management bemoaned that "first-quarter performance reflected a lack of enthusiasm for our fashion footwear by our core customers and an unfavorable response to our spring assortments across our key fashion categories."

The weak sales contributed to a loss of $0.15 per diluted share, following a $0.10 loss in last year's quarter. Operating cash flow was also negative again, and was likely a key reason that Bakers also announced a private placement of $4 million in convertible debentures. The company will receive $3.5 million in net proceeds and be stuck with a 9.5% interest rate. The debentures are also convertible to 444,444 shares of common stock should it ever reach $9 again. This represents almost 7% of total shares outstanding.

So, if you're interested in investing in a retailer with falling sales, which has dubious profit potential, and must raise capital from outside sources, this is the stock for you. Fortunately, anything can happen in retailing, since a new popular product can quickly turn a company's fortunes around. But the stakes are high, since continued failure can send a company into the trash heap.

In addition to Bakers, Sharper Image (NASDAQ:SHRP), Pier 1 Imports (NYSE:PIR), and Circuit City (NYSE:CC) are struggling in their respective retailing niches. A quick look at RadioShack's (NYSE:RSH) stock chart demonstrates the upside potential (should deteriorating trends reverse themselves), but it's always difficult to predict when and if that might happen. In Bakers' case, signs of a turnaround remain hidden to me.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.