NEW YORK – Sears is preparing to spin off its Hometown and Outlet stores as well as some hardware stores into a separate publicly traded company.

The news sent the company's stock up $2.58, or 5 percent, to $54 in premarket trading Monday.

Sears had signaled that it would split the companies back in February. There are a total of 1,238 Hometown, Outlet and hardware stores as of April 28, according to Sears, which is trying to turn around its business and spruce up its image. It has already closed five Hometown stores, eight hardware stores and one Outlet store.