What he needs to do is liquidate the business, which is exactly what he is doing slowly. This business can't survive as a retailer. It's too late. This business is wrecked, he's totally destroyed it.
Here's what's falling apart. Kmart can't compete with anybody...
Edward Lampert, who manages the hedge fund ESL Investments/RBS Partners, is the majority owner and currently the CEO of Sears Holdings ($SHLD). As noted on 1/2/2012, $SHLD needs to hold $30 support on the chart or things could get ugly (chart below). After reporting a "wider than expected 2Q loss" today, the stock is currently trading at $39.72, -8.2%. Sales also slid. According to the Chicago Tribune,
Sears blamed lower sales on the effect of having fewer Kmart and Sears full-line stores and the continued effects of having spun off their Sears Hometown and Outlet stores last year.
But, on the bright side, it looks like Sears is growing online. According to Michael Santoli at Yahoo Finance, "Online revenue, though, rose 20% from a year earlier." But it does continue to look like an ongoing real estate play.
Recent articles on Sears/Edward Lampert:
Sears Grows on the Web – but Can It Shrink Fast Enough Offline? (Michael Santoli, Yahoo Finance)
Sears CEO Edward Lampert Denies Secret Online Posts (ABC News)
John Galt and the Theory of the Firm (Paul Krugman, NYT)
At Sears, Eddie Lampert's Warring Divisions Model Adds to the Troubles (Businessweek)