Sears first signaled the split was a possibility back in February, as it began looking for ways to be more profitable and appealing to shareholders. The department store, along with competitor J.C. Penney (NYSE:JCP) has been struggling of late. Department store Macy’s (NYSE:M), on the other hand, has fared much better.
The spin-off is expected to raises somewhere between $400 million and $500 million.
Sears has a total of 1,238 Hometown, Outlet and hardware stores and has already closed more than ten of those stores.
Shares of the company were up nearly 9% in pre-market trading on the news. It is up more than 60% year-to-date thanks to a short squeeze, but is still in the red 15% for the last twelve months.