Edward S. Lampert isn’t backing away from Sears Holding Corp. so much as investors are walking out on him.

This story first appeared in the December 6, 2013 issue of WWD. Subscribe Today.

Lampert, who has taken a hands-on role at the company as chief executive officer, acknowledged in a regulatory filing this week that his stake in Sears had fallen to 51.6 million shares, or 48.4 percent of those outstanding. The 51-year-old investor who cut his teeth at Goldman Sachs had been in control of the majority of the retailer, beneficially owning 55.4 percent in March. The turning point seems to have come Monday, when Lampert’s ESL Partners investment vehicle gave 7.4 million shares of Sears — valued at about $450 million at the time — to compensate investors who were pulling money out of the fund. Since then, the stock has fallen 17 percent, closing down 1.9 percent Thursday to $49.98.

But that appears to cover just a small part of the exodus as big-time investors back away from Lampert.

The Wall Street Journal reported that institutional investors who pumped about $3.5 billion into Lampert’s ESL Investments Inc. via Goldman Sachs are pulling back their money after a five-year lockup period expired. Most of the funds are getting paid back this year through stock and cash distributions, according to the report.

RELATED STORY: Sears Loss Widens in Q3 >>

That’s a blow to Lampert, who bought Kmart out of bankruptcy and combined it with Sears, but failed to create a Warren Buffett-like empire out of the ailing retailers.

Most experts now see Sears as a company that’s methodically being liquidated, with money from the sale of stores or the spin-off of divisions making up for operating shortfalls.

“They have to sell assets every year to fund cash burn,” said Mary Ross Gilbert, an analyst at Imperial Capital.

Gilbert said Sears’ operations would not be impacted by the stock distributions, but noted the company would likely feel squeezed by other strategic moves on the way, including a potential Lands’ End divestiture.

“As they sell off the jewels, you’re left with two very unprofitable businesses in Sears and Kmart,” Gilbert said.

The analyst has an underperform rating on the stock, which she said should garner $19 a share as an ongoing business. In what she described as a generous liquidation analysis, Gilbert said the pieces of Sears Holdings add up to $44 a share.

Representatives for Lampert and Goldman Sachs did not respond to queries Thursday afternoon.