The US retail sector's fight for survival may be morphing into a contest to see which companies can hold their breath under water the longest. March same-store sales data again showed that Wal-Mart, Costco and other value-oriented vendors of staples are holding up well in spite of the consumer spending slowdown. But department stores and other sellers of discretionary items have seen little relief. Retailers across the board have slashed inventories and costs to offset the pressure that product discounting puts on margins. Most have kept their debt at more rational levels than in past cycles.

The terrain, however, is getting rougher for many discretionary goods retailers, and their risk-averse lenders will not wait indefinitely for the market to improve. Linens n Things, for example, which is owned by Apollo Management, has been selling far too few linens and things to sustain itself over the long term.