Hudson's Bay says it is considering strategic alternatives for its Lord & Taylor brand, including a possible sale or merger.

The news sent the stock sharply higher. Lord & Taylor, like other department stores, has struggled to adapt to a changing retail environment. Earlier this year, the brand closed its iconic Fifth Avenue location.

Saks-owner Hudson's Bay Company said Monday it is exploring strategic alternatives for its Lord & Taylor brand, including a possible sale or merger.

The news sent the stock sharply higher, up 3.4% by late morning.

Like other U.S. department stores, Lord & Taylor has been struggling as customers shop less at malls and more online. As a result, many department stores have been shuttering locations rather than opening them.

Lord & Taylor's footprint has fallen to 45 department stores as of Feb. 2, down from 50 a year ago. Among its store closures is its iconic Fifth Avenue location, which went dark earlier this year after the building was sold to WeWork.

Lord & Taylor's parent company has been trying to simplify its organization, strengthen its retail operations and improve its cost structure.

"This review of strategic alternatives for Lord + Taylor is another example of how we are exploring options to position HBC for long-term success," Hudson's Bay CEO Helena Foulkes said in a statement.

Last month, Hudson's Bay reported that fourth-quarter same-store sales for Lord & Taylor, Home Outfitters and its namesake brand declined by 5.2%. Its luxury department store brand Saks Fifth Avenue reported same-store sales growth of 3.9%.

The company announced Monday May 6 that it has retained PJ Solomon as its financial advisor for its review of the department store brand.