It's been a brutal time for retailers. Some of the bankruptcies include: Linens 'n Things, Goody's Discount Clothing and Sharper Image.

According to a report in the Wall Street Journal [subscription required], it looks like Mervyn's LLC is also in trouble and may even shut down this month as a variety vendors are stopping shipments. There are also issues with financing from CIT Group Inc
(NYSE: CIT).

Founded in 1949, Mervyn's is a low-priced retailer that's focused on young families. The typical store has 80,000 retail square feet. While there are 177 stores, they are concentrated in seven states, with a big concentration in California and Arizona -- both have suffered greatly from the real estate bust.

Back in 2004, a group of private equity firms, Sun Capital Partners Inc, Cerberus Capital Management, Lubert-Adler and Klaff Partners LP, purchased Mervyn's for about $1.2 billion, of which $400 million was in equity.

Are these folks suffering? Perhaps not. You see, the investors wanted to capitalize on Mervyn's real estate. As a result, the investment was structured into two sections. So while the retail component has lagged (and there has been lots of restructuring), the real estate component has done quite well.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.