Department store chain, J. C. Penney has recorded a higher than expected loss of $203 million or 93 cents a share during the recent quarter.

The company had recorded a profit of $186 million or 71 cents a share during the same quarter of the previous year. Analysts were expected a loss of about 19 cents a share but excluding some items, the company lost 56 cents a share during the quarter.

J. C. Penney's same store sales fell 26.1 per cent in the quarter compared to the same quarter of 2011, indicating that the company is struggling to attract and keep customers. It is believed that the company's troubles are increasing amid a turnaround effort and some are predicting the sales might continue to decline in 2013 and pose a threat to the survival of the firm.

The company's revenues during the third quarter of the year were recorded at the level of $2.92 billion, which is much lower than $3.23 billion expected by the market. Its gross margin fell to 32.5 per cent during the quarter from 37.4 per cent.

CEO Ron Johnson is betting on a ambitious transformation effort that involves refreshing locations and creating a stores-within-a-store layout to turnaround the firm and make it more competitive. He said that the customers are unhappy about what J. C. Penney has become but are excited about new stores.

"I'm really leading two companies. One is J. C. Penney, a promotion department store. The other is JCP, a specialty department store. What's going to be good for one is not going to be good for another," he said.

Shares of the retailer have closed 5 per cent below.