Sears, Roebuck & Co is to test a new standalone store type next year that it hopes will help it fight back against rivals such as Target and Kohl's.
The store represents a move away from the retailer's traditional preference for trading in shopping malls.
Chairman and chief executive Alan Lacy said the retailer is not as close to its customers as it should be and that shoppers are shifting away from malls to big-box retailers, such as Target.
The store may include an extended range of garden and home improvement products and will be followed by more shops if the pilot is successful.
On Monday, Sears, Roebuck & Co announced a US$500 million (£323 million) cost-cutting campaign, which will be in place by 2004.
The retailer wants to reduce in-house spending and target its direct mail campaigns more strategically.