GO
Loading...

Cramer: Nordstrom facing a sinking stock situation?

Of all the retail conference calls Jim Cramer heard last week, he found commentary form Nordstrom most disturbing.

"On the surface the conference call itself seemed like a good one," he admitted. "But then we heard about the spend."

That is, Nordstrom intends to spend $3.9 billion to stay competitive, with $1.2 billion earmarked for technology, in part to compete against other companies that have a growing presence online.




Patrick T. Fallon | Bloomberg | Getty Images

"What's so painful about the spend is that the better Nordstrom makes its websites, the less you have to go to Nordstrom, the store," Cramer said.

Of course Nordstrom needs an improved web presence to compete but at the same time it, "Takes the company's best attributes, its beautiful stores and its smart, caring salespeople, and renders them increasingly irrelevant," Cramer said.

And that could leave Nordstrom in a no-win situation, in part because the shopping experience at Nordstrom has always been a hallmark of the company.

Cramer sees the circumstance as somewhat akin to what happened in media, as newspapers spent boatloads of money to create and then improve their paper's presence online.

"The actual newspaper became an expensive, money-losing vestige. I fear that's where Nordstrom is heading," Cramer said.

-----------------------------------------------------------
Read more from Mad Money with Jim Cramer
For bears, market riddled with landmines
Cramer thrilled UPS slashed forecast
New company to be coveted by pros
-----------------------------------------------------------

Of course, it's still early innings and developments could take a turn for the better. Nonetheless, Cramer is concerned.

"Going forward when I hear about another retailer refreshing its omni-channel, I will no longer applaud. Instead, I will think about competitive pressure to the brick and mortar from the online site. That, plus increased spending will probably translate into lower gross margins and ultimately sinking stock prices."




(Click for video of this Mad Money segment)

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book