Sears Holdings (NASDAQ:SHLD) has been slowly dying since the company merged with Kmart in 2005. Watching this iconic American brand wither away has been painful. The company, once the largest retailer and employer in the United States, has been losing money since 2011. To stay afloat, it has been shedding assets and closing stores.

Earlier this year, Sears spun off its Lands End brand and Brian Sozzi, chief executive of Belus Capital Advisors, explained the logic behind that move to Reuters."Sears is in a steady state of decline," he said. "They're essentially selling their body parts so they stay alive today."

Now Sears has plans to sell more assets and CEO Edward Lampert acknowledged at the company's annual shareholder meeting (earlier this month) that store closures were in its future. The company quietly closed about 100 stores last year.

"They have too many stores and they're losing a lot of money, burning cash," John Kernan, an analyst with Cowen, told CNN Money. Kernan expects the company to close 500 of its 1,980 U.S. stores in a few years. Ultimately, he expects Sears to go out of business.

Where the troubles began
Sears -- like many retailers -- has struggled to compete with Internet retailers including (NASDAQ:AMZN). It has also lost its identity, while competitors Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) have strengthened theirs. Sears feels like a big store that sells a bunch of stuff -- a brand without an identity. Kmart is in even worse shape -- some customers know it as a less-nice Wal-Mart.

"There are tumbleweeds blowing through the parking lots at Kmart. They're basically completely irrelevant," Kernan told CNN Money.

Many questioned Lampert's decision to merge Sears and Kmart in 2005 in an $11 billion deal. At the time, Lampert was a hedge fund manager. He has been CEO of the merged company since February 2013 and his 2005 move looks more and more like an albatross that will drag both brands to their doom.

Change or die
The Sears death spiral has already slowed the company's investment in its stores, which in retail quickly becomes a self-fulfilling prophecy. If you don't constantly evolve with new merchandise, new store design, and other innovations, then customers will shop in stores that do. Target and Wal-Mart both aggressively cycle in new merchandise and both chains have invested heavily in new concepts over the past few years.

Target has revamped many stores to sell more fresh groceries and Wal-Mart has rolled out smaller grocery-only stores in parts of the U.S. Those are only two examples of things those companies have done to stay relevant while delivering a shopping experience its customers expect.  

While its brick-and-mortar competitors evolve, Sears has done little beyond seasonally rotating merchandise. Further, as Amazon finds new ways to become an even tougher competitor for physical retailers, has failed to gain any traction.

Sears needs cash
Lampert knows his company needs cash, so he will be selling one of its few remaining assets. Sears announced Wednesday that it would explore "strategic alternatives for its 51% interest in Sears Canada, including a potential sale of Sears Holdings' interest or Sears Canada as a whole. In connection with those efforts, Sears Holdings intends to engage an investment banking firm."

The cash from that eventual sale buys the company more time, but it's hardly a turnaround strategy. Instead it looks like Lampert is slowly selling off the pieces of the company, while it quietly goes out of business.  

Piecemeal may also be the best approach for selling the company's Canadian holdings as analysts doubt a buyer exists who would want the whole package.

"The pieces are likely worth more than the whole, particularly as we consider that the Sears brand has been allowed to decay," Jim Danahy, chief executive of consultancy CustomerLAB and director of the Centre for Retail Leadership at York University's Schulich School of Business, told Reuters . "This is carrion. The vultures are circling and they're not interested, no one's interested, in the whole thing."

The end is near
American history is littered with once-vaunted brands that are now historical footnotes. It seems unlikely that Lampert can revive Sears, and to some, it appears as if he's not even trying. Selling assets to buy time only makes sense if you have a plan that fundamentally changes your business model.

Instead, Sears looks like it will slowly shed assets, close stores, and cut expenses. Then, the last employee can turn out the lights on an American icon that probably should have died years ago.

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Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends The Motley Fool owns shares of Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.