Asleep in Seattle: Nordstrom's Clueless Quarter

The Nordstrom (JWN) quarter was devastating. Clueless. Just disheartening.

It was like listening to the executives of a personal computer company telling you not to worry about cellphones. Or like listening to dinosaurs telling you not to worry about the ice age.

I write those damning things because Nordstrom didn't even seem fazed by what just happened to them. Management simply accepted the fact that there wasn't a lot of traffic at the mall so they didn't do well. They acted like if they somehow put better merchandise in the stores it would solve the problem. They made a point that they got inventories under control so don't be too worried. They opined that they are merchants not economists and that it was all about fashion.

It's not, though. Not at all. It's about relevance. It's about who is going to the mall. Or more important, who isn't. At one point Best Buy (BBY) was just a showroom for Amazon (AMZN). Now the whole mall is a showroom for Amazon and that includes Nordstrom.

Now it is true that not all of Nordstrom is doing badly. The places where they offer the most compelling bargains did well, their off price and their web offerings. But basic Nordstrom? Wow, terrible.

What was really odd was that the downturn had nothing to do with the weather. They didn't mention it once. They simply just talked traffic. They even said that for what it was worth, coats did well!

Again, like with Macy's (M), I think this was the crossover quarter. This is the quarter where the cellphone replaced the mall. We are now living in a digital, mobile first world. Nordstrom needs to hire some incredibly smart, young people and populate them throughout the organization and get to the bottom of what the heck can be spared and what must be junked right now before it is too late. The idea of "build it they will come" is gone, even for a merchant as fine as Nordstrom.

The most devastating line on the call? When Jamie Nordstrom says "we're in the fashion business and there is an ebb and flow" to it.

No, you have to be in the technology business that includes a fashion component because there is no more flow, just ebb.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.