NEW YORK — It's like watching an old friend slowly fall apart.
Sears was once the place where families could go for an afternoon of one-stop shopping for everything from clothing to appliances to car parts. But it has struggled in recent years amid declining sales and stiff competition.
Now, Sears, which runs 2,500 Kmart and Sears stores, is considering separating its Lands' End catalog business and Sears Auto Center businesses from the rest of the company. The retailer also plans to continue closing some of its unprofitable stores and is selling some store leases in Canada.
The announcements came Tuesday as Sears warned that it expects a loss of $582 million in the third quarter on another drop in sales. The company said that for the 12 weeks that ended Saturday its sales at stores open at least a year fell 3.7 percent.
On the news, Sears shares rose $5.66, or more than 10 percent, to $61.22 midday.
The news underscores the intense pressure facing billionaire hedge fund manager and chairman Eddie Lampert, who took over as CEO in February to turn around the business. The storied retailer hasn't adapted as bigger, nimbler rivals such as Walmart and Home Depot have stolen away customers over the years.
Last year, Sears announced plans to restore profitability by cutting costs, reducing inventory, selling off some assets and spinning off others. Those moves helped it reduce net debt by $400 million and generated $1.8 billion in cash from the asset sales in the latest fiscal year. Sears also has been building a loyalty program called Shop Your Way, which accounts for 65 percent of its sales and has tens of millions of active customers.