In that case, we can strip hardware tag first, and then rename item tag to hardware.
Reason being, hardware tag appears once, item tag appears for every row.
Code snippet:
REPLACE ALL OCCURRENCES OF '<HARDWARE>' IN lv_xml WITH ''.
REPLACE ALL OCCURRENCES OF '</HARDWARE>' IN lv_xml WITH ''.
REPLACE ALL OCCURRENCES OF '<item>' IN lv_xml WITH '<HARDWARE>'.
REPLACE ALL OCCURRENCES OF '</item>' IN lv_xml WITH '</HARDWARE>'.