Cramer rethinks retail, spots new trend

(Click for video linked to a searchable transcript of this Mad Money segment)

After hearing from a slew of retailers this earnings season, Cramer thinks you may need to rethink what you want to own and why.

After lackluster earnings from countless retailers, the conventional wisdom would be to conclude that the consumer is challenged. Whether it's because of the sequester or higher gas prices or whatever, the reasonable conclusion would be earnings were disappointing because people are just less willing to spend.

In turn, that would suggest that retail is a sell. Cramer, however, doesn't think it is. Not even close.

"If you conclude that the consumer's, done, shot, never to be heard from again, I think that's a total wrong takeaway," he said.

After sifting through earnings from Lowe's, Home Depot and even TJX which owns Home Goods, Cramer thinks results show that consumers are less willing to spend on clothing. However, he believes they also show consumers are more willing to spend on their homes.

"Even strength at apparel chain Urban Outfitters was in part due to sales at Anthropologie, which is a store that sells premium home goods for the wealthy," Cramer said.

Martin Barraud | OJO Images | Getty Images

The Mad Money host wonders if this could be an early stage of a larger trend.

"What I think is happening after listening to all of these conference calls is that the consumer's held back on home spending because what the heck is the point of sprucing up your home if it is losing value."

However, home prices have started to stabilize and in some regions they're increasing.

"Now it pays to fix up your house. It's just a better investment than it's been," Cramer mused.

Conversely, Cramer thinks shoppers are spending less on clothing, either because they don't have enough disposable income to spend on apparel and home goods or simply because the intense competition makes it possible to spend less and get as much – especially if you buy on-line.

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If Cramer's right and this trend gains a foothold, than stores that leverage design and decor may be in the sweet spot. Conversely, stores that largely sell clothing may be facing headwinds.

"I wonder if, after this quarter, Macy's wishes it had more home and less apparel. I wonder whether Target and Wal-Mart which have moved aggressively into food and always have a presence in apparel, wish they had the product array that Lowe's and Home Depot have."

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