The stock is up 7.3% in pre-market trading after the book retailer said that it plans to split Nook Media into a separate, publicly traded company. The businesses “will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” Barnes & Noble CEO Michael Huesby says. The plan still needs to be approved by regulators, and the company says it could change course if  it can’t raise enough funding or the markets shift. B&N has hired Guggenheim Securities to provide financial advice, and Cravath, Swaine & Moore to handle legal matters.

The Nook tablet and e-reader business has been a drag on B&N as the products struggled to take market share from Apple’s iPads, Amazon’s Kindle, and a vast array of Android-powered tablets. That was evident in the just-released earnings for the 14-week period that ended on May 3. Nook revenues fell 22.3% vs a 13-week period last year to $87.1M although its cash flow loss narrowed 69% to about $56M.

Results for the entire company were more encouraging, especially in college text rentals and sales.  B&N reported a net loss of $36.7M, an improvement from last year’s $114.8M loss, on revenues of $1.3B, +3.5%. The top line beat analyst expectations for $1.19B. Sales at stores open at least a year fell 4.1% in the quarter — but if you take out Nook products, the number is down 1.9%. B&N says it expects retail sales to fall by a low single digit percentage this year while it cuts losses at Nook.