Mothercare turnaround continues as UK sales rise

LONDON, April 16 (Reuters) - British baby goods retailer Mothercare (LSE: MTC.L - news) showed further signs of a turnaround in its troubled UK business on Thursday, posting a 5.1 percent rise in underlying fourth quarter sales.

Mothercare is trying to revive its business in Britain, which generates around 60 percent of sales, but has suffered heavy losses partly due to cheaper competition from rivals like Primark and online retailers like Amazon.

In September, new boss Mark Newton-Jones tapped investors for 100 million pounds ($148 million) to help fund a restructuring, which will include store closures and revamps and improvements to its product range. The company has also moved to a more full-priced stance over promotions to protect margins.

Sales at UK stores open over a year rose 5.1 percent in the 11 weeks to March 28, compared to 1.1 percent growth in its third quarter. The firm has now delivered positive like-for-like sales growth in each quarter of the year and said its gross margin continued to stabilise.

"It is still early days in our turnaround, but we are putting the foundations in place by modernising and investing in our business," Newton-Jones said in a statement.

Mothercare's profitable international business posted sales growth of 11.4 percent at constant currency in the period.

The company, which trades from 189 UK stores and over 1,300 more overseas, is expected to post a profit of 12.3 million pounds for the year to March according to Reuters data, up 30 percent on the year before. ($1 = 0.6748 pounds) (Reporting by Neil Maidment; editing by Kate Holton)