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The retail industry's sweeping retrenchment is creating upward of $20 billion in sales opportunities for retailers that will survive the recession, a report released Thursday said.

Wal-Mart Stores Inc. (WMT), Target Corp. (TGT), Kohl's Corp. (KSS), Macy's Inc. (M) and J.C. Penney Co. (JCP) will be among the major beneficiaries, said the report by Deutsche Bank.

Best Buy Inc. (BBY), Bed, Bath & Beyond Inc. (BBBY) and Staples Inc. (SPLS) will also see gains because of softness in their respective categories, Deutsche Bank said.

"The retail shake-out will provide big opportunities for survivors," said Bill Dreher, senior retail analyst at Deutsche Bank.

The revenue opportunity, along with retail stocks tending to be "early-cycle" in nature, meaning they tend to start rising in anticipation of an economic recovery, makes a number of retail stocks especially appealing, Dreher said.

Deutsche Bank especially like Macy's, Kohl's, J.C. Penney, Target and Best Buy.

Companies that have many free-standing stores, like Kohl's, as opposed to being largely mall-based, will likely pick up greater share because of shifting trends in consumers' shopping habits, Dreher said.

Deutsche Bank sees $19.2 billion up for grabs from large retailers that have already closed or said they will be going out of business. Circuit City Stores Inc., Linens 'N Things Inc., Sharper Image Inc. and Mervyn's LLC are in this group.

Deutsche Bank also includes in the group companies that are still operating, but closing large numbers of stores. AnnTaylor Stores Corp. (ANN) and Charming Shoppes Inc. (CHRS) are in this group.

An additional $8.1 billion in sales stands to be lost by retailers whose debt is rated below investment grade and/or have negative earnings before interest, taxes, depreciation and amortization, Deutsche Bank said.

The companies include Sears Holdings (SHLD), Saks Inc. (SKS) Neiman Marcus , Bon-Ton Stores (BONT) Dillard's Inc. (DDS), Gap Inc. (GPS), J. Crew Group (JCG) and Limited Brands Inc. (LTD), Deutsche Bank said. The $8.1 billion assumes these retailers lose 5%, or more, of their sales.

The sales figures that Deutsche Bank lists are for the last reported 12 months.

Even after the recession ends, analysts don't see consumer spending returning to its former peaks soon, if at all.

As a result, sales aren't likely to be as high as they were coming into the recession.

But the amount of sales freed up as currently troubled retailers go under and greater problems emerge for weaker ones could well offset the spending pullback.

-By Karen Talley, Dow Jones Newswires; 201-938-5106; karen.talley@dowjones.com

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