Cramer's 'Mad Money' Recap: Retail Fire Sale

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"I don't think anyone's been more negative about retail than me," said Jim Cramer on his "Mad Money" TV show Monday.

Cramer has been telling viewers to "avoid retail at all costs," because retailers have been as hated as homebuilders and brokers.

However, he said, "things change when the Federal Reserve changes." In turn, it is time to start looking at retailers.

Cramer has changed his mind about Gap (GPS Quote), a stock that was "so loathed, so hated, so incompetent," he said. He likes that the stock has an improved balance sheet and a new CEO. The company carries $2.7 billion in cash and investments and only $514 million in debt. Gap reported revenue of $151.9 billion in fiscal year 2006.

On the inside, Gap announced a $1.5 billion stock buyback. In addition, Cramer likes new CEO Glenn Murphy and what the company is doing to improve the Banana Republic brand.

Cramer called the company undervalued and a "great turnaround story in a sector that is turning." While Gap is a "best-of-breed retailer," Cramer said that buying it this week will lose you money because you will be early.