SQL Server find and replace specific word in all rows of specific column

UPDATE tblKit
SET number = REPLACE(number, 'KIT', 'CH')
WHERE number like 'KIT%'

• SQLFiddle Demo

or simply this if you are sure that you have no values like this CKIT002

UPDATE tblKit
SET number = REPLACE(number, 'KIT', 'CH')

• SQLFiddle Demo