Now margins are rising and sales are at a nine-year high—two signs that the company’s multi-year “brand elevation” campaign has worked, Louvet told me in Paris recently. But it equally arms the company better for future global price and supply chain disruptions to come, he said. How did Louvet pull it off?

Before he arrived in 2017, Ralph Lauren “expanded in places where we probably shouldn’t have, which drove higher levels of promotional activity,” Louvet told me. “It was like the boiled frog phenomenon. I’m sure it was well-intended. Each year, we thought it was just marginal. But after a few years, you realize it’s not going to end well.”

Since then, he said, “we’ve had our eyes wide open on tough choices.” Joining Ralph Lauren after almost three decades at P&G, the native Frenchman took a page from his old employer’s turnaround book. To escape from the price race to the bottom, the company “took a one-year, painful hit” to reset consumer expectations.

Then, during COVID, Louvet reset the distribution strategy, and closed two thirds of its wholesale presence. The company, which now has a manufacturing supply chain stretching from Vietnam to Peru, is in a decent position to weather trade unrest. “If tariffs stay where they are, we have the ability to offset,” Louvet told me. “We can do efficiency work with our partners. But we can also continue our pullback on promotional activity, and perform selective price increases.”

But the big “a-ha!” for Louvet is finally getting back to what founder Ralph Lauren figured out so many decades ago—and what sets the company apart from other clothing retailers. “There are more parallels with companies like Disney,” Louvet observed. “We’re not in the apparel business,” he said, “We’re in the dreams business.”

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top news

Trump denies Bessent persuaded him to keep Powell

President Trump denied a WSJ report that said Treasury Secretary Scott Bessent helped him understand that removing U.S. Federal Reserve Chair Jerome Powell before the end of his term at the central bank would cause more problems than it would solve. “Nobody had to explain that to me. I know better than anybody what’s good for the Market, and what’s good for the U.S.A. If it weren’t for me, the Market wouldn’t be at Record Highs right now, it probably would have CRASHED! So, get your information CORRECT. People don’t explain to me, I explain to them!,” Trump said on social media. (Reality check: The market did in fact crash in April following Trump’s tariff announcements.)

Tariffs will cost Americans $2,800 per household

The Yale Budget Lab estimated how much extra U.S. consumers will pay once Trump’s import taxes are in place. It’s the highest tariff rate since 1910. Commerce Secretary Howard Lutnick said on Sunday that most countries’ exports will get a rate of 10% or more.

The FBI might have information about Trump and Epstein

Maria Farmer complained to the FBI about Jeffrey Epstein in 1996 and named Donald Trump in that process. The agency brought no charges based on her testimony. Trump has not been accused of wrongdoing in connection with Epstein. Nonetheless, the NYT reports, it is possible that Trump’s name is sitting in the FBI’s investigative files.

The White House is souring on Netanyahu

The Israeli leader’s aggressive war against Gaza and Syria is now “out of control,” White House sources told Axios. “Bibi acted like a madman. He bombs everything all the time,” one source said. It’s not clear how much patience Trump has left for him.

Sen. Warren on tariffs

In an exclusive interview, Senator Elizabeth Warren told Fortune that “the impact of six months of Donald Trump will be felt for two generations.” White House spokesman Kush Desai told Fortune in a response that “No one has suffered more from America’s lopsided ‘free’ trade arrangements and foreign countries’ unfair trade practices than the working class Americans who Elizabeth Warren has always pretended to be a champion for.’”

Astronomer CEO resigns

The Astronomer CEO who went viral for an intimate moment with his Chief People Officer has resigned, according to the company. The private data infrastructure and operations company wrote that, “While awareness of our company may have changed overnight, our product and our work for our customers have not." 

AI generates false diagnosis for U.K. patient

A patient in London was mistakenly invited to a diabetic screening after an AI-generated medical record falsely claimed he had diabetes and suspected heart disease. The summaries, created by Anima Health’s AI tool Annie, also included fabricated details like a fake hospital address. NHS officials have described the incident as a one-off human error, but the organization is already facing scrutiny over how AI tools are used and regulated.

Young people have a new, annoying way to answer the phone

They don’t say anything. Not even “hello.” That’s because they’re inured to junk and robocalls and are screening the call for meaningful interaction with people they know.

The markets

S&P 500 futures were up 0.27% this morning. The index closed flat at 6,296.79 on Friday. China’s SSE Composite was up 0.72%. The STOXX Europe 600 was flat in early trading. The Nikkei 225 was down 0.21%. Bitcoin was up 1.44%, at more than $119K.

From the analysts

JPMorgan on OpenAI: “Frontier model innovation an increasingly fragile moat. We view the inability of a single provider to have a sustained competitive edge as a signal model commoditization is a likely outcome (OpenAI’s once flagship GPT-4 now ranks 95th in LM Arena),” per Brenda Duverce and Lula Sheena.

Deutsche Bank on inflation: “Inflation risks are still being underestimated, with a remarkable complacency across key assets. That is particularly so when you consider that the 2021-23 inflation spike wasn’t anticipated at all in advance. And it’s already the 4th year in a row (so far) that markets have overestimated how dovish the Fed are going to be. Today, there are several factors coalescing at a global level that can push inflation higher still. Most notably, tariff rates are rising, with a 10% baseline in the US and several sectoral tariffs already imposed. There’s still the looming prospect of tariffs on August 1 which markets simply aren’t pricing in yet. In the Euro Area, there’s a huge fiscal stimulus in the pipeline, at a time when unemployment is at multidecade lows,” per Henry Allen.

Macquarie on the Fed split: “Comments coming from Fed officials suggest that the FOMC is cleaving, with a vocal side arguing for rate cuts to begin now, and another side (including Jay Powell) still wanting a delay. But that split persist, could evolve into a split along political lines, with one side swayed by political motives, and the need to accommodate fiscal policy, at the expense of adherence to the price stability mandate. This would contribute to US yield-curve steepening,” per Thierry Wizman and Oliver Allen.

Around the watercooler

Top economist sounds the alarm even louder on the housing market and says homebuilders are ‘giving up’ by Jason Ma

There’s a ‘scary’ recession warning hidden in the too-good-to-be-true economic data, Wells Fargo warns, by Jason Ma 

Crayola CEO’s how-to-succeed guide for new hires: Lose the tie and pretend you don’t know anything by Irina Ivanova

Experienced software developers assumed AI would save them a chunk of time. But in one experiment, their tasks took 20% longer by Sasha Rogelberg

After earnings fell by $300 million, Cardinal Health’s CEO went ‘ruthless’ to turn it around—and he says workers backed him because ‘people want to win’ by Emma Burleigh

CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.