KERING 
FRANKFURT (Reuters) - German sportswear company Puma (>> Puma AG Rudolf Dassler Sport) plans to keep spending to sign up top athletes and celebrities after its flagship star Usain Bolt retires, seeking to bolster a brand that lags market leaders Nike (>> Nike) and Adidas (>> Adidas).
"We are continuing to invest in sports," chief executive Bjorn Gulden told journalists after the company published full second-quarter results, adding that spending on marketing would remain between 10 and 12 percent of sales in the longer run.
Appointed in 2013 by majority-owner French luxury goods company Kering (>> Kering), Gulden has invested heavily in celebrity marketing to turn around the Puma brand.
For example, Usain Bolt has been at the centre of a push to sell sports performance gear, also boosted by its sponsorship of English soccer side Arsenal.
With the eight-times Olympic sprinting champion nearing his last race, the group has signed Canadian Olympic silver medallist Andre de Grasse as well as a number of Jamaican sprinters.
Puma has also seen strong demand for products promoted by celebrities such as model Cara Delevingne and Canadian rapper The Weeknd.
Earlier this month, it hiked its guidance for 2017 sales and operating profit as it announced a 16 percent jump in currency-adjusted second-quarter sales, led by demand for its shoes.
Like German rival Adidas, which reports results on Aug. 3, Puma has been enjoying a revival in the U.S. market, helped by a shift towards retro styles and away from basketball shoes which has hurt Under Armour (>> Under Armour Inc) and dented Nike's success.
"The good thing is that the newer products are selling well, which means that we get a better margin," CEO Gulden said.
Puma's operating margin jumped to 4.5 percent in the second quarter, from 1.4 percent in the year-earlier period, as its earnings before interest and tax (EBIT) more than tripled to 43.4 million euros ($50.5 million).
"In the beginning you have to over-invest relative to your sales. Now we are at the point where the leverage is kicking in, which means that for every euro of sales we are getting a bit more profit," Gulden said.
"But there is still room to improve, and we have to improve," he added.
($1 = 0.8601 euros)
(Reporting by Maria Sheahan; Editing by Victoria Bryan and Mark Potter)
