Thousands of stores are closing and retail chains are curtailing operations because of the economic slowdown, the newspaper said Monday.

Eight chains -- including Levitz Furniture (OTCBB:LVFIQ) and The Sharper Image, which specializes in electronics -- have filed for bankruptcy protection since last fall, The Times said. The crunch is reaching out to affect larger chains, such as Linens 'n Things, a bedding and furniture retailer that operates 500 stores.

Citing people briefed on the situation, the newspaper said Linens 'n Things may file for bankruptcy this week.

Foot Locker, Ann Taylor and Zales Jewelers plan to close hundreds of stores during the coming year, the report said.

Retailers rely heavily on credit for their day-to-day operations, but Al Koch -- a vice chairman and managing director with AlixPartners, a corporate turnaround and financial advisory firm -- told the Times that U.S. banks, which have problems of their own with the mortgage crisis, are increasingly reluctant to lend money to the retail sector.

"You have the makings of a wave of significant bankruptcies," said Koch.

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