And Sears' customer-satisfaction level has been improving, says Claes Fornell, a University of Michigan business school professor who tracks these things. But that might be because the most dissatisfied customers have mostly left, which mathematically pushes up the average ratings of remaining customers who are polled, says Fornell. Still, it's a reversal.

Sears also recently announced it is hiring Leveraged Marketing of America to explore how to extend its popular Kenmore, Craftsman and DieHard brands to new products and new regions of the world.

Despite all these efforts, things don't look good for Sears, say analysts. A sluggish economy, a weak appliance market and high gasoline prices, combined with Sears' self-inflicted wounds, suggest sales will continue to shrink at least this year, if not beyond, they say. Wall Street analysts predict a 5% overall sales decline this year and a 2% decline next year, according to Thomson Financial.

Sin No. 5: A credit scare

Those weak sales trends have been worrying Sears' lenders. Back in December, Fitch Ratings downgraded Sears' debt, explaining that those weak sales, and the possibility that one measure of cash flow could turn negative this year, may force Sears to increase borrowing. Fitch also cited "competitive pressures, inconsistent merchandising execution, and the lack of clarity about the company's longer-term retail strategy." Then in January, a financial firm called CIT Group (CIT) said it would stop acting as an intermediary between Sears and its suppliers.

This was bad news, because small developments like these can quickly snowball, drying up credit for a retailer, says Davidowitz. Lampert reacted quickly. He announced the sale of 11 stores, the spinoff of Hometown and Outlet stores, and improvements in inventory management. Together, these steps should raise mroe than $1 billion. "Lambert's reaction the minute trouble started was magnificent," says Davidowitz. "No one has ever accused him of not knowing finance."

But it also may foreshadow what really may be in store for Sears, as those negative sales trends continue.

So what's the endgame?

Sales trends suggest Sears is dying. Current efforts could turn it around, but the recent track record isn't good, and a big part of the game plan remains store and asset sales to generate cash. Tellingly, a big part of the most recent conference call with investors covered this kind of financial wizardry, as opposed to the basic block and tackle of retail.

"I think it all comes apart. It dissembles," says Cohen, the former Sears Canada CEO. "(Lampert) will continue to sell off pieces and parts. There is no meaningful strategy to manage the business successfully in any conventional way."

That kind of scenario won't necessarily help shareholders. But another option might. Swinand, at Morningstar, thinks Lampert could eventually take Sears private to try to fix it up inside his hedge fund.

Such a move would mean a premium for shareholders as Lampert buys their stock.

The catch is, there's no telling how much the stock might sink between now and when this scenario plays out, if it does. So there's little point in buying Sears now, hoping the stock will jump in a take-under.

For shoppers, the hedge-fund manager's financial wizardry may mean your neighborhood Sears will disappear. They won't all go at once, but they're already going. Of course, retailers go away all the time.

But icons shouldn't.

Stocks mentioned in this article include: Sears Holding (SHLD), Wal-Mart (WMT), Target (TGT) and IBM (IBM).

At the time of publication, Michael Brush did not own shares of any company mentioned in this column.

Michael Brush is the editor of Brush Up on Stocks, an investment newsletter. Click here to find Brush's most recent articles and blog posts.