Don’t Follow Cramer Into J.C. Penney Company, Inc. (JCP)’s Rivals

Macy’s, Inc. (NYSE:M) is up a less impressive 7% — weaker than both the S&P 500 and the SPDR Retail ETF. Macy’s is perhaps a bit more upscale than J.C. Penney, but it does have some product crossover. Both stores, for example, sell men’s Levi’s jeans around $40 per pair (Macy’s online store/J.C. Penney’s online store).

Yet, if Macy’s can only manage a 7% gain in a year in which J.C. Penney was eviscerated, further gains on J.C. Penney’s behalf seem unlikely. If anything, the company’s court battle over J.C. Penney’s ability to sell Martha Stewart products could be more substantial — a legal victory would eliminate potential competition.

Cramer’s recommendation of The Gap Inc. (NYSE:GPS) is the weakest. To be clear, The Gap owns a number of different clothing stores, including its namesake brand, Banana Republic and Old Navy. Gap is slightly more upscale than J.C. Penney — to go back to the example of men’s jeans, it sells them for $60 and up — while Banana Republic is far more upscale. Old Navy is the most comparable to J.C. Penney, but it makes up only a portion of the larger Gap corporation.

In the last year, shares of The Gap Inc. (NYSE:GPS) are up nearly 40%. While this is nearly the inverse of J.C. Penney’s 60% decline, given their different markets, other factors are likely at work.

Too late to play J.C. Penney’s loss

With a 30% decline in its sales, J.C. Penney Company, Inc. (NYSE:JCP) has obviously lost customers to other stores. That said, with Ullman at the helm, as long as the company does not completely liquidate, it’s unlikely that the retailer will lose more.

It’s too late, then, to try to profit off J.C. Penney’s demise. Avoiding J.C. Penney at this time could be smart, but jumping into its competitors would not be.

Joe Kurtz owns shares of J.C. Penney. The Motley Fool has no position in any of the stocks mentioned.