Sweedler added the company is looking for brands with tangible licensing potential to guarantee contracted income, as well as diversified retail partnerships to mitigate the risk of any particular store going out of business.

But while there still might be deals done in 2009 despite the recession, the year follows a dismal 12 months for M&A activity overall.

If the pace from September to January continues through the rest of 2009—which is what M&A leaders predict, based on both credit access and the general gloom in retail these days—this year may rival 2002's 23 deals for the fewest public ones done in the last decade, according to Factset Mergerstat.

"It was a very tough year for M&A because 2008 was probably one of the toughest years in memory for retail performance," said Cooper of Peter J. Solomon, adding their restructuring group's work on the distressed market is paying the bills that M&A had formerly. "And 2009 has started off the same way 2008 ended."

There were 40 public arena deals within the sector in 2008, down 31 percent from 58 deals in 2007, which was down 22 percent since 2006's record 71 deals. Moreover, the total value of deals fell 56 percent to $2.4 billion in 2008 from $5.4 billion in 2007, according to Factset Mergerstat.

But not all of 2008 was a bust for industry M&A activity. The first eight months of the year saw 35 deals. The slowdown came between September and November, which saw only two deals, while December picked back up with three.

So far in 2009, two relatively small public deals have taken place:

• On January 19, Sportsclick Inc., a Canadian wholesaler of licensed sports goods, acquired Southprint Inc., a Martinsville, Virginia-based wholesaler of licensed Nascar apparel, for $2.4 million. Southprint had revenues of $15 million in 2007.
• On January 21, Technology Resources Inc. bought the Kona, Hawaii-based Shaka Shoes Inc. for about $4 million, according to Factset Mergerstat, and the parent company has adopted its new acquisition's name.

Michael Dart, a principal at Kurt Salmon Associates and head of its private equity and strategy practice, said deals were being funded by putting down at least double the equity capital, versus debt capital, than required in the boom days of yore. With companies needing to put down 30 to 40 percent equity, versus 15 to 20 percent previously, the size of deals that can be done is limited. Dart said he expected middle-market deals of $20 million to $300 million in enterprise value.

"Whatever deal you put in place [has to be able to allow the company to] survive continued negative comps for a continued time," Dart said. "Companies are maintaining all of their capital to maintain liquidity. They are gaining on their weaker competitors rather than buying them. But for contrarian investors with a reasonable amount of capital and a long holding period, this could be a great opportunity to make great long-term returns."

And while elective deals may have slowed due to increased caution, distressed deals have increased, according to M&A sources. In these cases, both size and swiftness are essential. Those deals can happen for as little as free—assuming the cost of running the brand going forward—up to a small multiple, said sources. They also must be fast, before the retail situation worsens.

"There are people looking for value transactions. A lot of larger—$150 million and up, generally speaking—privately held businesses with equity know that if they can add some good top line to their business [by buying a $30 million to $70 million business], it will be of value," said Allan Ellinger, senior managing partner of Marketing Management Group.