Quarantine 'Crushing' Both Good, Bad Retailers, Cramer Says
The coronavirus is "crushing" both good and bad retailers, as consumers are starting to realize they could easily live without a Kohl's Corporation (NYSE: KSS), CNBC's Jim Cramer said Wednesday on "Mad Money."
Kohl's Borrows Funds, Suspends Dividend
Kohl's announced last Friday an agreement to borrow $1.5 billion, yet its stores will stay closed, Cramer said. The company also suspended its dividend, which Cramer said was one of the few reasons to own the stock in the first place.
The public is living "just fine" without going to Kohl's, as consumers can get "pretty much everything" online in the first place, and often at cheaper prices, he said.
Kohl's Cash, the company's loyalty program, is maybe akin to "Monopoly money," Cramer said.
Macy's Inc (NYSE: M) is scrambling to raise $5 billion through the debt market to avoid going bankrupt.
Why It's Important For Retail
Kohl's is far from the only department store or retailer struggling. High-end operator Nordstrom, Inc. (NYSE: JWN) has a service problem, and the late Bruce Nordstrom admitted to Cramer that Amazon.com, Inc. (NASDAQ: AMZN) has better service, the CNBC host said.
Simply put, the malls are now full of "stuff we don't need," Cramer said.
Even malls that offered a mixed experience with entertainment properties like those operated by Federal Realty Investment Trust (NYSE: FRT) are not suited to operate in the current environment, he said.
"The experiential economy? Shambles," Cramer said.
What's Next For Retail
The coronavirus could wreak havoc on the retail industry and destroy tens of millions of jobs moving forward, Cramer said. The sad reality is that "this was a matter of time anyways," he said.
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