Eddie Lampert has long aspired to turn around Sears Holdings and remake himself in the process.

Such a success would transform him from hedge fund manager to businessman. That's why he has been so reluctant to parcel off Sears Holdings' assets.

But now Lampert, whose firm controls Sears Holdings with 48 percent of the stock, has reorganized his company and stepped back from his intensive management. His hand-picked C.E.O. is leaving.

Is this a concession that the strategy hasn't worked? Of course. (See related story from the February issue of Condé Nast Portfolio, "The Marriage From Hell.") But that doesn't mean Lampert has given up his dream quite yet.

First, the reorganization. Lampert has split the company into five new divisions: brands, operations, real estate, support, and online. Each will have its own leader and its own profit-and-loss statement, the company says. Lampert will no longer have any direct reports.

The reshuffle didn't get high marks from former executives. "It makes no sense to me," said a former high level Sears Holdings executive who agreed to speak about the company only if not identified publicly. "There's some intellectual and economic theory elegance to it. But the practical aspect is where it gets lost."

Say the new head of the brands division wants to create value for Kenmore, the highly regarded appliances business. The logical thing would be to license the brand to a retail chain—Home Depot, Lowes, Best Buy. But how will the head of the new retail operations division react to losing the exclusivity of the brand?

Or what happens when the real estate division wants to sell or sublet a Kmart or Sears? It would look to sell an attractive, profitable location. That might be good for that unit's P&L but may not be good for the company overall. The new organization seems like a recipe for intracompany strife.

Moreover, each division is going to make demands for personnel and capital. Lampert has been starving the business of capital spending. It seems highly unlikely he will relinquish control over capital allocation decisions and equally unlikely that he has a newfound desire to pour money into the business. How long before the division heads can't take it anymore?

At least Lampert realizes he needs a seasoned retailing executive to run this five-legged stool. And so his hand-picked C.E.O., Aylwin Lewis, who had come from fast food company YUM Brands, is leaving.

That departure will make little difference at the company. Lewis's job was to travel around to the stores (Eddie rarely did that) and to be the public face. He was popular with the staff and other executives, but he had little operational authority. Eddie retained that for himself, and he charged his number two at the hedge fund, Bill Crowley, with implementing his wishes.

It seems unlikely that Lampert will be able to recruit a top-notch retailing executive. Any star will be suspicious that Lampert will be able to restrain himself from meddling. Is he really going to back off when the bulk of his personal wealth is tied up in Sears? Moreover, a lot of retailers said they think that Sears Holdings cannot be turned around. A Lampert spokesman wasn't available for comment.

This year will be pretty tough. Sears Holdings will likely suffer continued sales declines and margin pressure. There aren't big savings left to reap from cutting sales and marketing.

So all roads eventually lead to asset sales. The divisional structure suggests this. Brands and real estate will be dressed up for sale. The question is whether it's too late. Lampert is a savvy trader of financial assets, but he may have waited too long this time.