J.C. Penney (NYSE: JCP) denied plausible rumors that CIT Group Inc. (NYSE: CIT) has cut off credit to small vendors of the retailer. The conjecture may be supported by a sharp drop in the company’s same-store sales. It is the same problem that plagued the retailer for two years under fired CEO Ron Johnson. Investors believed that this crisis might be mitigated by Mike Ullman, the new chief executive, and his efforts to take J.C. Penney back to its roots. If he has failed, the retailer has no future at all as a standalone company.

In Johnson’s last full year at the top of J.C. Penney, revenue dropped 21% to $12.99 million. Same-store sales cratered more than 25%. In the preceding four years, same-store sales were relatively flat.

Numbers in the first quarter of this year improved, but not enough for J.C. Penney to survive. Revenue was $2.64 billion, a drop 16.4% compared to the same quarter in 2012. Comparable-store sales decreased 16.6%.

J.C. Penney did pick up some financing, but based on the CIT news (true or not), it might not have been enough. Goldman Sachs Group Inc. (NYSE: GS) lined up a credit facility of $1.75 billion earlier this year. If J.C. Penney’s losses are running at the rate of last year, nearly a billion dollars per annum, experts looking at J.C. Penney books would conclude that the Goldman facility is not nearly enough.

J.C. Penney has not given investors sufficient data about same-store sales during the second quarter, and projections for the current quarter are too little for outsiders to realistically make a decision about its fate. Its shares did drop to $14.60 after hours on the CIT rumor, but they still are modestly above the 52-week low of $13.55. Perhaps not all investors have given up all hope.

J.C. Penney probably even lacks the money to close many of its nearly 1,000 stores. The expenses of severance and shuttering facilities could run into the tens of millions of dollars, if not higher. Loyal J.C. Penney customers in some locations would be without a store. The disruption to the company’s effort to reach out to consumers with the message that the old J.C. Penney has come back would be damaged beyond recovery.

J.C. Penney’s financiers must have looked at the one metric that really counts — same-store sales — and decided a hoped-for recovery is already dead.

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