Density matrix embedding theory (DMET) is a relatively new technique for the calculation of strongly correlated systems. Recently, block product DMET (BPDMET) was introduced for the study of spin systems such as the antiferromagnetic model on the square lattice. In this paper, we extend the variational Ansatz of BPDMET using spin-state optimization, yielding improved results. We apply the same techniques to the Kitaev-Heisenberg model on the honeycomb lattice, comparing the results when using several types of clusters. Energy profiles and correlation functions are investigated. A diagonalization in the tangent space of the variational approach yields information on the excited states and the corresponding spectral functions.

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