Shares of Sears Holdings (SHLD), the retail empire controlled by billionaire Edward Lampert, rose Monday after the company announced plans to spin off some of its stores not connected to its flagship brand into a separate company. Two Sears, though, are not necessarily better than one.

The company's 1,238 Hometown and Outlet franchises, along with some hardware stores, will be part of a new company called Sears Hometown and Outlet Stores, which will trade under the ticker symbol SHOS. As with Sears Holdings, Lampert's ESL Investments Inc. will control the new company. Not surprisingly, the fate of the two Sears companies will be closely linked.

Sears Hometown will license Sears Holding's Kenmore, Craftsman and DieHard brands, whose products accounted for about 60% of 2011 sales, according to a filing with the Securities and Exchange Commission. The new company will depend on its former parent for key services, including accounting, supply-chain management and website hosting. Sears Hometown will also be placed at a competitive disadvantage after the separation.

"Although we plan to leverage our ongoing relationship with Sears Holdings in order to obtain similar benefits in purchasing power, we may be unable to obtain goods, technology and services at prices and on terms as favorable as those available to us prior to the separation, which could increase our costs and reduce our profitability," the SEC filing says.

Sears Holdings has signaled for months that it was willing to sell anything that wasn't nailed down. Earlier this year, the retailer announced plans to spin off part of its Canada business. There were also media reports that Lampert was trying to unload Sears' Lands' End business. The preppy brand has been a poor fit with Sears ever since the retailer bought the company for $1.86 billion in 2002.

The fact that Sears has yet to find a buyer for Lands' End, even at a steep discount to its purchase price, does not bode well for Sears Hometown. Indeed, the new company's financial performance is not great.

During the 2011 fiscal year, sales were $2.34 billion, little changed from $2.35 billion in the year-earlier period. Net income during the same time was $33.1 million, down from $49.8 million in the 2010 time frame. Sales in the first quarter of 2012 rose 3.7% to $479.9 million as the company opened 35 Sears Hometown and 45 Sears Home Appliance stores. Same-store sales, a key metric for retail companies, rose a lackluster 0.1% during the quarter.

Sears Holdings is set to report earnings Wednesday. The company is expected to post a loss of 86 cents in the July quarter on revenue of $9.63 billion. Revenue has declined for 19 straight quarters and is expected to continue falling for the foreseeable future.

Monday's pop in Sears Holdings' shares will be short-lived once investors realize that slicing and dicing the company won't do much to address the company's underlying weaknesses. Any stock with the name "Sears" should be avoided.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr.