UPDATE 3-Sears CEO to leave; interim replacement named

(Adds details on Lewis, Johnson, stock price)

NEW YORK, Jan 28 (Reuters) - Sears Holdings Corp (SHLD.O) said Chief Executive Aylwin Lewis would leave the company by Feb. 2, the latest shake-up of the struggling operator of the Sears and Kmart retail chains.

W. Bruce Johnson, executive vice president of supply chain and operations, will take on the additional roles of interim CEO and president, the company said in a statement.

The move comes days after Sears Holdings, which is controlled by hedge fund manager Edward Lampert, said it would separate business units and simplify the way they are managed in a bid to improve results and reverse recent profit declines.

"The board has determined that now is the right time to put in place new leadership to take the company forward," Lampert said in a statement on Monday.

Lampert will lead the board's search for a permanent CEO.

The company was formed with the 2005 merger of Kmart and Sears, a deal that was supposed to help revive two of America's best known but long-struggling retail brands.

Lewis, a former executive at restaurant group Yum Brands (YUM.N), became Kmart's CEO in 2004 and was named Sears' CEO in September 2005. He replaced Alan Lacy, who was under pressure from Wall Street for failing to revive Sears' sales.

But Sears has continued to struggle. Lampert has focused on cutting costs instead of investing in stores, while Lewis has faced criticism for not having substantial traditional retail experience.

Meanwhile, Sears is contending with stiff competition from retailers like Wal-Mart Stores Inc (WMT.N) and Target Corp (TGT.N) to win customers, while the U.S. economic slowdown has crimped sales of home goods like appliances and tools.

Earlier this month, Sears warned that quarterly profit could come in at less than one-half of year-ago levels and reported lower holiday sales, citing competition and the crumbling U.S. housing market.

Johnson, who joined Kmart in 2003 as senior vice president of supply chain and operations, will now oversee the five types of business units under Sears' new decentralized structure.

Separately, Sears said it might still be interested in a transaction with Restoration Hardware RSTO.O, even though the high-end home goods chain has already accepted a management-led buyout.

According to a regulatory filing, Sears is reviewing the amended terms of that buyout to understand the implications for any future deal it might contemplate.

Sears shares fell 45 cents to $98.55 in afternoon Nasdaq trading. The stock is now down almost 50 percent from a high of $195.18 reached in April. (Reporting by Nicole Maestri and Franklin Paul in New York and Sweta Singh in Bangalore; Editing by Lisa Von Ahn, Derek Caney and Dave Zimmerman)