Updated from 10:46 a.m. EDT

Kmart

(KMRT)

named Aylwin Lewis, a former executive at restaurant operator

Yum! Brands

(YUM) - Get Report

, to replace Julian Day as its president and chief executive.

A 13-year veteran of Yum! and an independent director at

Disney

(DIS) - Get Report

, Lewis was president and chief multi-branding and operating officer at the company, whose brands include Pizza Hut, KFC and Taco Bell restaurants. He will also take a seat on Kmart's board.

Day oversaw Kmart when it emerged from bankruptcy last May and has been CEO during a period in which the stock's price has more than quintupled. He will remain on the company's board.

"I am proud to have led the outstanding team that has accomplished so much at Kmart," Day said in a statement. "As I relinquish my executive responsibilities at the company, I am confident that we have established the strong foundation that will allow Aylwin to focus on the goal of achieving operational excellence in all aspects of our business."

While Day gets some credit for Kmart's stunning turnaround, its architect is widely considered to be the company's chairman and biggest shareholder, Edward Lampert. The hedge fund manager bought a controlling stake in Kmart during its bankruptcy and has squeezed cash out of its assets by streamlining operations and selling off real estate. He now sits on Kmart's board, and a recent regulatory filing gave him the right to invest its growing cash hoard, lending credence to Wall Street hopes that he will turn the company into an investment vehicle.

"Aylwin Lewis brings to Kmart a wealth of retail operating experience, a track record of personal and corporate success, tremendous people skills, a strong work ethic and commitment to excellence," Lampert said in a statement. "He is the ideal leader and agent of change for Kmart at this time, and we are pleased that he has embraced this challenge with his characteristic passion."

Gary Balter, an analyst with UBS, described Day as a financial-oriented executive, ideal for expanding margins during Kmart's turnaround mode. He said Lewis' appointment is a positive now, because he is an operational expert who can help Kmart grow as a business. He also said the announcement could be viewed as a signal that Kmart is preparing for acquisitions outside of the retail space, since Lewis comes from a restaurant background.

"Kmart doesn't talk to the Street, so none of this was expected," Balter said (he does not own Kmart shares and his firm has no investment banking relationship with the company, but it does make a market in its securities). "But we can assume that

Lewis interviewed them as well as they interviewed him. That means that he looked at their game-plan and was satisfied enough to join them, which is a good sign on its own."

Shares of Kmart were recently down 18 cents, or 0.2%, to $86.53.