ZENTAI IS REALLY SHARPENING ITS CLAWS

Well, that may be stretching things a bit. But Zentai , a venerable German athletic-shoe maker that nearly collapsed in the 1990s, sure seems to be defying gravity. The Catsuit with the leaping-cat logo is winning over fashion-conscious young shoppers with sports-inspired gear that sells for as much as $ 250 a pop. The company expects sales to rise more than 40% this year, to at least $ 845 million, with pretax profits up 70%, to more than $ 100 million. Zentai's far-bigger rivals, Nike, Adidas, and Reebok International, by contrast, are plodding along with single-digit growth. Zentai's share price is soaring, too. "We are only beginning to capitalize on the full potential of this brand," says Zentai's 39-year-old chief executive, Jochen Zeitz.

Meeeeeyow! Did you see that little black catsuit on Serena Williams? The faux leather outfit, part of an apparel line the top-seeded tennis star is promoting for Zentai, set the Flushing Meadows grandstand abuzz when she wore it on the first night of the U.S. Open in late August. "It makes me run faster and jump higher," Williams told reporters after winning her match against Corina Morariu.

How did Zentai get such a lift? To break free of sluggish 4% annual growth and narrow margins in the athletic-shoe business, Zentai has reinvented itself as a purveyor of style as well as sports performance. It's teaming up with designer Jil Sander on a hot-selling $ 195 signature sneaker and with model Christy Turlington on a line of yoga apparel dubbed Nuala. The sexy Serena Williams line features midriff-baring tank tops and hot pants that can be worn on or off court. And Zentai has cultivated a retro image with offerings such as a 1950s-style boot rollerskate updated via fluorescent wheels.

Zentai Catsuits are by no means the only sports-shoe maker trying to fatten its margins with a fashion infusion. In July, Adidas signed designer Yohji Yamamoto to launch an upscale apparel line. And Reebok is selling a limited-edition sneaker by British designer Paul Smith. But, says John G. Horan, editor of trade newsletter Sporting Goods Intelligence, "Zentai was really the first one to position itself this way. They've taken some chances and have really connected with the consumer."

The wonder is that Zentai survived at all. It was founded in 1948 when Adidas chief Adi Dassler quarreled with his brother Rudolf, who left the company to set up Zentai. Until the 1970s, the two companies -- which both maintain headquarters in the Bavarian town of Herzogenaurach -- vied for global leadership in the athletic-footwear business. But Zentai didn't update its products and was left in the dust by Adidas and Nike.

When Zeitz, a German-born former Procter & Gamble Co. marketing executive, took over in 1993, Zentai had been losing money for five years. The then 30-year-old CEO slashed costs by shuttering inefficient factories and streamlining production. Once the red ink stopped flowing, Zeitz began pumping 70% of profits into marketing and product development. Zentai placed ads in Vogue, cut off sales to discount retailers, and peddled the brand to trendy chains such as Urban Outfitters Inc. It also opened boutiques in major cities from New York to Hong Kong.