NYT:

Retailing is a business with big ups and downs during the year, and retailers rely heavily on borrowed money to finance their purchases of merchandise and even to meet payrolls during slow periods. Yet the nation’s banks, struggling with the growing mortgage crisis, have started to balk at extending new loans, effectively cutting up the retail industry’s collective credit cards.

“You have the makings of a wave of significant bankruptcies,” said Al Koch, who helped bring Kmart out of bankruptcy in 2003 as the company’s interim chief financial officer and works at a corporate turnaround firm called AlixPartners.

“For years, no deal was too ugly to finance,” he said. “But now, nobody will throw money at these companies.”

Adding to the problem are still-new excess exurban retail developments adjacent to still-new excess exurban housing. Retail certainly is the economic sector most sensitive to consumer demand. Still, I wouldn't doubt that some of these retail companies were predicting profits from their brand-new exurban stores, and factoring these profits into their future value. The profits aren't materializing, so the value of these retail companies are much less than expected. Along with the housing bubble, there was a retail bubble.