• In today’s CEO Daily: Nick Gordon talks to Coach CEO Todd Kahn.

• The big story: Japan elects its first female prime minister.

• The markets: Up outside the U.S.

• Plus: All the news and watercooler chat from Fortune.

Good morning. Asia editor Nick Gordon here, filling in for Diane Brady.

Coach CEO Todd Kahn has much to be happy about. The brand is surging on a wave of social media-fueled demand, as Gen Z shoppers flock to products like the iconic Tabby bag. Coach is the most successful division of parent company Tapestry (No. 534 on the Fortune 1000), reporting $5.6 billion in revenue in its most recent fiscal year (ended June 28), compared to $7 billion for the broader company. Shares are up over 75% for 2025 so far.

Kahn has led Coach since 2020, when he took over as interim CEO and brand president—an appointment that was made official a year later. He joined Tapestry in 2008 as its general counsel and secretary, following previous roles in the apparel and fashion industry.

I sat down with Kahn at Coach’s new coffee shop in Singapore’s Sentosa Island earlier this month. Similar to how Ralph Lauren is using Ralph’s Coffee as an entry point for selfie-hungry Gen Z consumers, Coach is piloting a slickly-designed spot for young Singaporeans. Over a cup of chili crab soft serve ice cream, we talked about tariffs, selling American brands to Chinese consumers, and how social media has built the next generation of Coach fans. 

On the escalation of tariffs. Kahn and I met a few days after U.S. President Donald Trump threatened new 100% tariffs against China. (Trump has since moderated his tone.) Coach doesn’t manufacture in China, yet Kahn noted that “business generally does better when there’s more certainty. The lack of certainty makes it really hard to plan, to invest and do things.” Kahn is optimistic that Coach’s focus on a smaller number of affordable, yet consistent products puts it in a better place to manage cost and price increases than its competitors. “I’m much happier about being in the $300 to $600 range than if I’m at $3,000 now having to deal with tariffs.”

On selling in China. Tapestry grew its Greater China revenue by 5% to hit $1.1 billion in its last fiscal year, even as other foreign brands struggle to fend off affordable domestic rivals. “A great bag is a great bag everywhere,” Kahn said. Coach’s brand positioning “aligns really well with the young Chinese consumer.” He pointed out that Coach goes for breadth and depth in its research, combining big data from its millions of customers with “ethnographic work” following consumers into their homes and shops. “This administration should value the fact that we can win with a Chinese consumer because of American design. That combination is very powerful,” Kahn said. 

On connecting with Gen Z. Coach’s bags have been a hit on social media, which Kahn credits to building a “holistic story” around the brand’s products and retail experience. “If you’re just [focusing] on product, but the environment isn’t inviting for Gen Z, you’re not going to capture them,” he said. “Fashion has always looked to the youngest generation for inspiration.” 

Case in point: As we end our conversation, Kahn points out two young shoppers taking a selfie in front of a product display, chili crab ice cream in hand.

If you want to hear more insights about design and business, be sure to check out Fortune Brainstorm Design, to be held in Macau on Dec. 2. We’ve previously featured famed designers like industrial designer Tom Dixon, former Ford chief designer Anthony Lo, and Gensler co-CEO Elizabeth Brink. Stay tuned for more news on this event in the months to come.

More news below.

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

Top news

History in Japan

Japan’s parliament elected Sanae Takaichi as the country’s first female prime minister on Tuesday. Investors cheered the improbable rise of the amateur heavy metal drummer and hard-line conservative, who’s expected to increase defense spending, cut taxes, and revive Japan’s nuclear power industry.

Apple’s iPhone surge

Shares of Apple surged 4% to hit a new record on Monday after a report of surprisingly strong sales of its new iPhone 17. The device is a hot commodity in China. Apple’s run on Monday made the Cupertino giant the second largest U.S. company by market cap behind Nvidia. 

U.S.-Australia rare earths deal

U.S. President Donald Trump has signed a rare earths deal with Australia in which both sides will invest in mines and processing plants in Australia to increase output of the commodities that are used in advanced technologies. The deal worth $8.5 billion is aimed at countering China's new restrictions on the rare earths supply chain that it largely controls. 

Air traffic controllers turn to Uber

The U.S. government shutdown has dragged into its third week with few signs of a breakthrough. Government employees who have worked without a paycheck are growing desperate. Fortune reports on air traffic controllers who are driving for Uber and DoorDash to make ends meet. 

CEOs fear tariffs 'retaliation' 

Mark Cohen, the former CEO of Sears Canada, told Fortune in a new interview that tariffs are a “burden on every element in the supply chain” and CEOs aren’t speaking up about them out of fear of “retaliation.” Retailers won’t be able to skirt their effect on holiday goods, Cohen warns.

OpenAI cofounder: 10 years until AI agents 'work'

During an appearance on the Dwarkesh Podcast, OpenAI co-founder Andrej Karpathy noted that “it will take about a decade” before AI agents have enough intelligence to replace humans. “You should think of it almost like an employee or an intern that you would hire to work with you,” Karpathy said.

The markets

S&P 500 futures were down 0.05% this morning. The index closed up 1.07% in its last session. STOXX Europe 600 was up 0.02% in early trading. The U.K.’s FTSE 100 was up 0.19%  in early trading. Japan’s Nikkei 225 was up 0.27%. China’s CSI 300 was up 1.53%. The South Korea KOSPI was up 0.24%. India’s Nifty 50 was up 0.1% before the end of the session. Bitcoin dropped to $108K.

Around the watercooler

Top analyst still thinks we’re on the cusp of a new boom for the economy, but investors aren’t with him: ‘Markets remain choppy’ by Nick Lichtenberg

Wall Street might be panicking over private credit, but insiders can’t see what all the fuss is about by Lily Mae Lazarus and Jim Edwards

J. Crew CEO bought her first interview suit at the iconic retailer. Now she wants to capitalize on nostalgia by Nino Paoli

Scott Galloway says don’t aspire to be a billionaire, because ‘it’s not going to get you anything.’ Here’s what to do with money instead of hoarding it by Dave Smith

CEO Daily is compiled and edited by Joey Abrams and Claire Zillman.