To collapse a single directory, double click on it. You
  can collapse a particular directory path one level at a
  time by double clicking on single directories.

  To collapse selected directories level by level, click
  on the first directory you want to select. Continue
  to select directories by shift clicking on them. When
  selecting the last directory, double click while still
  pressing the Shift key. This selects the last directory
  and collapses all the directories you have selected.