Retail Gets Coldwater Poured On It

Bad to worse. That's Coldwater Creek (CWTR - commentary - Cramer's Take). If you want to see why owning a retailer is so perilous, read this company's late-night bulletin in which it guides things down so severely that you begin to worry about its survival, not its multiple.

Let's start with the idea that CWTR was one of the greatest momentum stocks not that long ago, putting up stores doing a nifty online business and getting baby boomers to buy in. This $5 stock -- soon to be $3, I guess -- traded at six times this price a little more than a year ago.

That's a stunning decline. People have been cutting numbers for months for these guys and it still doesn't matter because the estimates can't keep pace with the declines. And there is always someone trying to call the bottom as there was and has been in Pacific Sunwear (PSUN - commentary - Cramer's Take), Macy's (M - commentary - Cramer's Take), Talbot's (TLB - commentary - Cramer's Take) and Chico's FAS (CHS - commentary - Cramer's Take) or Charming Shoppes (CHRS - commentary - Cramer's Take).

I think we will hit a bottom when these companies say "we are going to close all underperforming stores, or we are going to take a big hit," etc. Then if they don't, I believe, honestly, they simply may not make it.

At the time of publication, Cramer had no positions in stocks mentioned.

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