CHICAGO — Billionaire hedge fund manager Edward Lampert thinks he can succeed where a host of others have failed: selling more merchandise at Sears.

Lampert, who orchestrated the takeover of Sears, Roebuck and Co. in March after bringing Kmart Holding Corp. out of bankruptcy, said last week that he will oversee marketing, merchandising, design and online businesses at Sears Holdings and its Lands' End clothing unit.

The management shake-up at the nation's third-largest retailer also included the demotion of Sears Roebuck chief executive Alan Lacy. His four-year tenure as Sears' top executive was marked by falling sales and capped by the takeover of the venerable retailer by Kmart.

Replacing Lacy is Aylwin Lewis, currently president of the holding company and CEO of the retail division overseeing both Sears Roebuck and Kmart stores.

Thursday's shake-up was announced in tandem with disappointing second-quarter results for Sears Holdings.

The news did not please Wall Street. Sears' stock closed down 5.2 percent to $127.81 as results fell short of expectations.

Sears' stock reached $163 in July as investors bet that Lampert, who earned an estimated $1.02 billion last year managing his hedge fund, would sell off real estate and brands. However, only the company's West Coast hardware chain has been put on the block so far.

Further changes appear to be in store. Lampert hinted on Thursday that Sears Holdings, which already cut about 1,400 jobs, will further reduce costs.

"Many of our retail competitors have much lower cost structures that allow them to run different business models that are valued by both employees and customers alike," Lampert said in a letter to shareholders.

Gary Balter, a Credit Suisse First Boston analyst who in June predicted that Sears stock could reach $180, said the company's results came in as expected.

"The lack of asset sales will keep some wondering whether these assets have the values we believe," he wrote to clients. "Even the greater involvement of Eddie Lampert can raise some concerns that the story is not playing out for him, although he has been micromanaging this company from Day 1."

Bulls' food for thought includes improving profits at Sears and better sales results at Kmart, while bears will note Kmart's earnings drop and Sears' 7.4 plunge in sales at stores open at least a year.