In a quarterly update press release Tuesday morning, Sears Holdings Corp. (NASDAQ: SHLD) reviewed actions it has taken or is contemplating in an effort to “improve our financial flexibility and accelerate our transformation into a leading Integrated Retailer.” Among the items it mentions is that same-store sales for the quarter ending October 26 declined by 3.7%, reflecting a drop of 4.8% at its domestic Sears stores and 2.6% at its Kmart stores.

The big news is that Sears is evaluating spinning off both its Lands’ End business and its Sears Auto Centers. Here is what the company had to say:

We believe separating the management of these two businesses from Sears Holdings would allow them to pursue their own strategic opportunities, optimize their capital structures, attract talent, and allocate capital in a more focused manner while bringing our business unit structure to life outside of the Sears Holdings portfolio.

Lands’ End is typically thought of as one of the company’s most attractive brands, but in 2012 it shared the responsibility for 120 basis point drop in Sears’ domestic gross margin. It also shared the blame for a 180 basis point drop in 2011.

A spin-off of Lands’ End would not be a sale, but some sort of spin-off to Sears shareholders. The company said it is now evaluating strategic alternatives for its Auto Centers, which it is trying to reposition around non-tire-related services.

Sears Canada will sell five store leases to a Canadian firm for a total price of CDN$400 million (about $383 million). Sears owns a 51% stake in Sears Canada.

Shares of Sears were up about 7% in mid-morning trading Tuesday, at $59.44 in a 52-week range of $38.40 to $68.77.

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