Cramer's 'Mad Money' Recap: Retail Best of Breed

A Wearhouse Buy

Men's Wearhouse(MW Quote) was the No. 4 company on Cramer's list, and he said that it's a company that investors need to take more seriously.

The retailer continues to roll out new, innovative concepts to keep the company growing, he said, referring to its Moores and K&G brands.

Even though it's managed like a mom-and-pop business, Men's Wearhouse "may be the most creative of all the national chains" that Cramer follows.

Federated's High-End Story

Moving on to high-end retail, Cramer said that he would take a look at Federated Department Stores(FD Quote), which owns names including Macy's, Bloomingdale's, Filene's and Lord & Taylor.

The company got better-looking after it bought the underperforming May Department Stores, and now it has lots of capacity and the leeway to shut down the stores that are doing poorly and keep the winners.

The May's acquisition gave Federated tons of clout with suppliers, beaten out only by Wal-Mart, and Cramer said that the company's management is good.

"The real story with Federated is high end," he said, noting that consumers want to buy upscale merchandise. Plus, the company has the opportunity to turn the middle-of-the-road stores that it acquired from May into higher-end Macy's or Bloomingdales.

The Reach of Sears

Cramer owns Sears(SHLD Quote) for his Action Alerts PLUS charitable trust portfolio, and it is his No. 6 pick for best-of-breed retailers.

"You can't treat Sears just like any other retailer," he said, and it's because the company is in the hands of chief executive Eddie Lampert," a man who began working on Wall Street at the age of 14.

Forget anything you've heard about his lack of merchandising talent, Cramer said, because all Lampert cares about is making the most money possible.

Sears is more of a real estate story than a retail story, but he believes this will change and that the same-store-sales growth will take Wall Street by surprise.

In the meantime, Sears is overstored in the U.S. by roughly 1,000 locations, Cramer said, and it can get rid of several of these locations as it does more business in Canada. Plus, he believes that Lampert has stabilized the recently acquired Kmart.