Three years ago this month, Kmart, led by chairman Eddie Lampert, announced plans to buy Sears for $12 billion, uniting two of the retailing world’s most recognizable, though faltering, brands under the umbrella of Sears Holdings. At the time, analysts believed the merger was done for the sake of acquiring real estate and predicted that Lampert would shed underperforming stores, just as he did in 2002 when he bought Kmart. What happened next?

Up ’n’ down: After the deal was announced, Sears shares jumped 91 percent. Since then, sales at both chains have continued their premerger slide. This year, Sears stock is off 33 percent from its high in early April.

Squeezing Martha: Kmart has reduced shelf space for Martha Stewart’s line of products, contributing to losses at Martha Stewart Living Omnimedia. Sears Holdings also negotiated to shrink Stewart’s lucrative deal with Kmart.

Payload: Lampert, who doesn’t draw a salary, capped executive compensation at $5 million a year. In 2006, C.E.O. Aylwin Lewis, formerly president of the fast-food retailer Yum Brands, earned $4.8 million, one-third of what his predecessor Alan Lacy took home in 2005. (Lacy was demoted, then left the company.) 

Workers’ burden: In 2006, Sears cut medical benefits for retirees under 65 and laid off 2,000 out of 342,000 total workers by reducing staff at Sears Canada and closing Kmart’s headquarters in Troy, Michigan. This year, Lampert froze the company’s $5.6 billion pension plan.  

Belt tightening: Since November 2004, Sears has trimmed its media spending by 5 percent, to $740 million, and slashed spending on stores and equipment by 50 percent, to $474 million. 

Open ’n’ close: Prior to the merger, Kmart had 1,480 stores, while Sears and Sears Canada had 2,026 and 392, respectively. In early February, Sears Holdings reported a total of 3,791 stores. Net loss: 107 stores. 

Bottom line: Investors’ patience with Lampert may be wearing thin. He has yet to bring shoppers back, and there’s no sign he’s ready to sell any of the company’s most valuable assets, its real estate holdings. Still, thanks to frugality and cost cuts, Sears has lots of cash to make a revenue-boosting acquisition.