Cramer: Tiffany needs to get off its luxury throne

Tiffany needs to change its luxury-oriented business model to capitalize on lower gas prices, CNBC's Jim Cramer said Friday.

"Tiffany is a classic example of what doesn't work versus say Darden," Cramer said on CNBC's "Squawk on the Street." "Let's say you're pumping [gas] and it was costing you $80, and now it cost $60. You can't take that additional $20 and buy a Tiffany diamond ring. You can go buy a ... more expensive craft beer, but you're not going to buy Tiffany."

Cramer made his remarks after the jewelry company posted fourth-quarter earnings of $1.51 per share, in line with analysts' expectations. Nevertheless, it also reported that quarterly sales declined 1 percent, sending its shares down more than 3 percent late Friday morning. Tiffany's stock is down about 20 percent for the year, according to FactSet.

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"Tiffany is the least levered of any company in retail I follow to lower gasoline prices. It just doesn't work, and it's got a lot of issues. It's a well-run company, but it's not a winner in an environment where people have more money and can buy more stuff at Ross Stores," Cramer said.

Read MoreTiffany's sales fall after five years on stronger dollar

He said Nordstrom, another high-end retailer, has been able to capitalize on weaker oil prices with its off-price Rack stores. "Nordstrom has pivoted and is more levered toward gasoline."

DISCLOSURE: Cramer's family trust did not own any of the stocks mentioned in this article at the time of its publication.