(Update: Additional analyst's commentary inserted.)

There are not many options when it comes to investing in retail these days. Personal spending has fallen for eight of the past 10 months, investors are eagerly awaiting consumer-sentiment numbers, due this Friday, for any sign of hope.

But if you are looking for a turnaround story to snatch up, Jim Cramer recommends

Urban Outfitters

(URBN) - Get Report

-- or at least he did during his "Mad Money" segment on Monday.

Last month, the contemporary apparel retailer beat Wall Street's first-quarter forecast by a penny, aided by stronger margins and fewer discounts.

The company's sales fell 2% to $385 million, while its total same-store sales dropped 9.6%.

And while Cramer said there is still some work to do, the company is sticking to its long-term goals, which include: long-term revenue growth of 20%, operating margins back near 20% and EPS growth that exceeds revenue growth.

"I feel confident now that the worst could be behind the company and that the stock should soon begin to work its way back to the mid-20s. As such, I plan to use any upcoming weakness to add to my positions," Jordan Kahn said in a

RealMoney.com report on May 14

.

Shares of the company closed down 5% to $20.47 on Monday.

Women's apparel retailer

Coldwater Creek

(CWTR)

is also experiencing something of a turnaround under new CEO and President Daniel Griesemer -- but Cramer remains bearish on the stock.

The company narrowed its loss in the first quarter to $7.6 million, or 8 cents a share, compared with a loss of $9.2 million, or 10 cents, in the year-ago period. Sales for the quarter dropped 16% to $228.4 million from $271.1 million, and total same-store sales plunged 18.6%.

As UBS analyst Roxanne Meyer says, the company has done a good job at playing defense when it comes to inventory management and cost control, and these numbers are slightly better than prior results, but it's not enough, for you to jump aboard.

The biggest difference between Coldwater Creek and Urban Outfitters, it should be noted, is that Coldwater was suffering before the recession even began, as the retailer lacked newness.

Indeed, Meyer placed Coldwater Creek on her "least preferred" stock list, citing a mismanaged product assortment. She wrote in a note on Tuesday that the product assortment through spring is too basic and lacks differentiation.

Urban Outfitters had been more consistently trend right -- and, once the economy rebounds, appears well positioned to regain shoppers.

Cramer notes, however, that at the end of the day, retail is the most difficult segment in the market to navigate right now -- and he would hold off buying any player in the group. So consider yourself warned.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.