NEW YORK (Reuters) - Retail sales may have recovered nicely in the past year, but a resurgence in acquisitions and IPO activity may have to wait until next year due to tougher financing and market volatility.

The number of U.S. retail deals has totaled 113 so far this year, down slightly from 120 deals in the same period a year ago, according to data from Thomson Reuters.

"There's very little M&A activity. There's very little bankruptcy activity. There's very little retail closure activity, and there's very little retail expansion activity," said Hilco Real Estate Executive Vice President Nina Kampler.

"I thought 2010 was going to be M&A land," Kampler said at the Reuters Consumer and Retail Summit in New York. "People are very tentative -- very, very tentative. And so the M&A activity, contrary to what we all expected, is not happening. I hear people saying it will happen in '11 and '12 instead."

Blockbuster deals such as the $11 billion merger of Federated Department Stores Inc and The May Department Stores Co to create Macy's Inc (M.N) in 2005 are a thing of the past because so few attractive, large targets remain.

"There are not that many large retailers left to merge," Gilbert Harrison, chairman of investment firm Financo Inc, said at the summit.

"There's tremendous activity in the $100 million to $200 million deal space. But the overall retail universe has shrunk and shrunk tremendously," Harrison said.

PRIVATE EQUITY ON SIDELINE

The few deals that have occurred have actually attracted rich multiples, such as Phillips-Van Heusen's (PVH.N) $3 billion deal in March to acquire Tommy Hilfiger. That deal was valued at roughly 8-times trailing earnings before interest, taxes, depreciation and amortization, harkening back to the heyday of the buyout boom.

Much of the retail M&A this year has also been consolidation among store operators. Jones Apparel Group Inc (JNY.N) in May agreed to buy designer shoe company Stuart Weitzman Holdings for an initial cash payment of $180 million, while shoe retailer Steve Madden Ltd (SHOO.O) acquired handbag designer Big Buddha Inc.

"All or most of the acquisitions we're doing today are strategic in nature," Harrison said.

Private equity investors have been scouting for deals as well, but funding has gotten hard to come by, given investor aversion to debt-laden companies.

"There are certainly strategic conversations going on that are fueled by private equity or hedge fund money," said Matthew Katz, global retail practice leader for restructuring advisory firm AlixPartners.

"They frankly have not had the ability to raise the debt that's needed to do these deals," Harrison said. "If they do a deal that's going to take 70 percent equity to do, they're not going to get the returns they want, so they've been sitting on the sidelines."

Another impediment is that retail executives are typically equipped with decades of expertise in an insular industry, making it harder to find talent.

"The challenge of retail is that you have to have the right operators -- it's not easy to buy a distressed retail business and try to turn it around," Katz said.

IPO MARKET ALSO COOLS

Much like the rest of the IPO market, new stock offerings by retailers will be dominated by buyout-backed companies whose owners are looking to cash out.

"The first priority of these private equity funds is to take the healthy businesses in their portfolio and try to sell them or take them public," Harrison said.

Last autumn, a number of high-profile retailers broke a two-year U.S. IPO drought in the sector, including discounter Dollar General Corp (DG.N), backed by private equity firm Kohlberg Kravis Roberts & Co (KKR.AS), youth apparel chain rue21 Inc (RUE.O) and Vitamin Shoppe Inc (VSI.N) .

But that spurt has proved short-lived and the going remains tough for retail offerings. One large deal in the IPO pipeline is Toys R Us TOY.UL which has filed to go public in an $800 million stock flotation. This year, the sole retail U.S. IPO so far was a $272 million deal last month by specialty apparel company Express Parent LLC (EXPR.N).

But IPO investors have proved reluctant to invest in private equity-owned companies because the proceeds are typically used to pay down debt rather than fund growth.

Still, the experts see private equity waiting in the wings.

"The private equity funds that have been in the business are slowly getting back into the business," Harrison said.

(Reporting by Phil Wahba and Jessica Hall; Editing by Michele Gershberg and Matthew Lewis)