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How the CEO of Ralph Lauren got the company through the ‘boiled frog phenomenon’ of going too wide, too cheap

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Most 20-something trendsetters don’t own a sailboat, a tasteful cottage on Nantucket, or even a pony-emblazoned Polo shirt. But under CEO Patrice Louvet, Ralph Lauren is still enticing young people into its orbit. To familiarize the TikTok generation with the Ralph Lauren lifestyle, the company now operates 35 “Ralph’s Coffee” store-in-stores. “It’s an amazing platform to get in touch with younger consumers,” Louvet said. “For 20-year-old women […] it’s the first engagement with the brand.”

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.

This is the web version of CEO Daily, a newsletter of must-read global insights from CEOs and industry leaders. Sign up to get it delivered free to your inbox.



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The $124 trillion Great Wealth Transfer is intensifying as inheritance jumps to a new record

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Nearly $300 billion was inherited this year as the Great Wealth Transfer picks up speed, showering family members with immense windfalls.

According to the latest UBS Billionaire Ambitions Report, 91 heirs inherited a record-high $297.8 billion in 2025, up 36% from a year ago despite fewer inheritors.

“These heirs are proof of a multi-year wealth transfer that’s intensifying,” Benjamin Cavalli, head of Strategic Clients & Global Connectivity at UBS Global Wealth Management, said in the report.

Western Europe led the way with 48 individuals inheriting $149.5 billion. That includes 15 members of two “German pharmaceutical families,” with the youngest just 19 years old and the oldest at 94.

Meanwhile, 18 heirs in North America got $86.5 billion, and 11 in South East Asia received $24.7 billion, UBS said.

This year’s wealth transfer lifted the number of multi-generational billionaires to 860, who have total assets of $4.7 trillion, up from 805 with $4.2 trillion in 2024.

Wealth management firm Cerulli Associates estimated last year that $124 trillion worldwide will be handed over through 2048, dubbing it the Great Wealth Transfer. More than half of that amount will come from high-net-worth and ultra-high-net-worth people.

Among billionaires, UBS expects they will likely transfer about $6.9 trillion by 2040, with at least $5.9 trillion of that being passed to children, either directly or indirectly.

While the Great Wealth Transfer appears to be accelerating, it may not turn into a sudden flood. Tim Gerend, CEO of financial planning giant Northwestern Mutual, told Fortune’s Amanda Gerut recently that it will unfold more gradually and with greater complexity

“I think the wealth transfer isn’t going to be just a big bang,” he said. “It’s not like, we just passed peak age 65 and now all the money is going to move.”

Of course, millennials and Gen Zers with rich relatives aren’t the only ones who sat to reap billions. More entrepreneurs also joined the ranks of the super rich.

In 2025, 196 self-made billionaires were newly minted with total wealth of $386.5 billion. That trails only the record year of 2021 and is up from last year, which saw 161 self-made individuals with assets of $305.6 billion.

But despite the hype over the AI boom and startups with astronomical valuations, some of the new U.S. billionaires come from a range of industries.

UBS highlighted Ben Lamm, cofounder of genetics and bioscience company Colossal; Michael Dorrell, cofounder and CEO of infrastructure investment firm Stonepeak; as well as Bob Pender and Mike Sabel, cofounders of LNG exporter Venture Global.

“A fresh generation of billionaires is steadily emerging,” UBS said. “In a highly uncertain time for geopolitics and economics, entrepreneurs are innovating at scale across a range of sectors and markets.”



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Apple rocked by executive departures, with chip chief at risk of leaving next

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Apple Inc., long the model of stability in Silicon Valley, is suddenly undergoing its biggest personnel shake-up in decades, with senior executives and key engineers both hitting the exits.

In just the past week, Apple’s heads of artificial intelligence and interface design stepped down. Then the company announced that its general counsel and head of governmental affairs were leaving as well. All four executives have reported directly to Chief Executive Officer Tim Cook, marking an exceptional level of turnover in Apple’s C-suite. 

And more changes are likely coming. Johny Srouji — senior vice president of hardware technologies and one of Apple’s most respected executives — recently told Cook that he is seriously considering leaving in the near future, according to people with knowledge of the matter. Srouji, the architect of Apple’s prized in-house chips effort, has informed colleagues that he intends to join another company if he ultimately departs.

At the same time, AI talent has been fleeing for tech rivals — with Meta Platforms Inc., OpenAI and a variety of startups poaching many of Apple’s engineers. That threatens to hamper the company’s efforts to catch up in artificial intelligence, an area where it’s struggled to make a mark. 

It all adds up to one of the most tumultuous stretches of Cook’s tenure. Though the CEO himself is unlikely to leave imminently, the company has to rebuild its ranks and figure out how to thrive in the AI era. 

Within the company, some of the departures are cause for deep concern — with Cook looking to stave off more with stronger compensation packages for key talent. In other cases, the exits just reflect the fact that veteran executives are nearing retirement age. Still, many of the shifts constitute a disconcerting brain drain.

While Cook maintains that Apple is working on the most innovative product lineup in its history — a slate that’s expected to include foldable iPhones and iPads, smart glasses, and robots — Apple hasn’t launched a successful new product category in a decade. That leaves it vulnerable to poaching from a range of nimbler rivals better equipped to develop the next generation of devices around AI.

A spokesperson for Cupertino, California-based Apple declined to comment.

The exit of Apple’s AI chief, John Giannandrea, followed a number of stumbles in generative AI. The company’s Apple Intelligence platform has suffered from delays and subpar features. And a highly touted overhaul to the Siri voice assistant is roughly a year and a half behind schedule. Moreover, the software will rely heavily on a partnership with Alphabet Inc.’s Google to fill the gaps in its capabilities.

Against that backdrop, Apple began phasing Giannandrea out of his role in March but is allowing him to remain until next spring.

Within Apple, employees have long expected Giannandrea to step aside — and some have expressed surprise that he’s sticking around as long as he is.

But parting ways with Giannandrea sooner would have been taken as public acknowledgment of a problem, people familiar with the situation said. 

Design veteran Alan Dye, meanwhile, is heading to Meta’s Reality Labs unit — a remarkable defection to one of Apple’s fiercest rivals.

Within a day of that news, Apple turned around and announced that it had poached one of Meta’s executives. Jennifer Newstead, chief legal officer at the social networking company, will become Apple’s general counsel. She helped oversee Meta’s successful antitrust battle with the US Federal Trade Commission — experience that’s likely to prove useful in Apple’s own legal fight with the Justice Department over alleged anticompetitive practices.

Read More: Apple Taps Meta Lawyer as General Counsel in Latest Shake-Up

Newstead is taking over for Kate Adams, who served eight years in the role and will retire in late 2026. Lisa Jackson, vice president for environment, policy and social initiatives, is retiring as well — and her duties will be divided up among other executives. 

Though the news of Adams’ departure was jarring — especially considering the number of Apple legal disputes currently on her plate — she’s had a fairly long tenure for a general counsel at the company.

Jackson, meanwhile, was widely expected to be leaving soon. The former Obama administration official has kept a lower profile during President Donald Trump’s second term, opting to dispatch deputies to handle discussions with the White House. Bloomberg News had previously reportedthat she was considering retirement.

These exits follow an even bigger departure. Jeff Williams, Cook’s longtime No. 2, retired last month after a decade as chief operating officer. Another veteran leader, Chief Financial Officer Luca Maestri, stepped into a smaller role at the start of 2025 and is likely to retire in the not-too-distant future.

The flurry of retirements reflects a demographic reality for Apple. Many of its most senior executives have been at the company for decades and are roughly the same age — either in their 60s or nearing it.

Cook turned 65 last month, fueling speculation that he would join the exodus. People close to the executive have said that he’s unlikely to leave soon, though succession planning has been underway for years. John Ternus, Apple’s 50-year-old hardware engineering chief, is considered by employees to be the frontrunner CEO candidate.

When Cook does step down, he’s likely to shift into the chairman job and maintain a high level of influence over the iPhone maker. That makes it unlikely that Apple will select an outsider as the next CEO, even as executives like Nest Labs founder Tony Fadell are being pushed as candidates by people outside the company. Though Fadell helped invent Apple’s iconic iPod, he left the tech giant 15 years ago on less-than-friendly terms. 

For now, Cook remains active at Apple and travels extensively on behalf of the company. However, the executive does have an unexplained tremor that causes his hands to shake from time to time — something that’s been discussed among Apple employees in recent months.

The shaking has been noticed by both executives and rank-and-file staff during meetings and large company gatherings, according to people familiar with the matter. But people close to Cook say he is healthy and refute rumors to the contrary that have circulated in Silicon Valley.

Read More: The Apple Insiders in the Running to Succeed Cook

A more imminent risk is the departure of Srouji, the chip chief. Cook has been working aggressively to retain him — an effort that included offering a substantial pay package and the potential of more responsibility down the road. One scenario floated internally by some executives involves elevating him into the role of chief technology officer. Such a job — overseeing a wide swath of both hardware engineering and silicon technologies — would potentially make him Apple’s second-most-powerful executive.

But that change would likely require Ternus to be promoted to CEO, a step the company may not be ready to take. And some within Apple have said that Srouji would prefer not to work under a different CEO, even with an expanded title.

If Srouji does depart, which isn’t yet a certainty, the company would likely tap one of his two top lieutenants — Zongjian Chen or Sribalan Santhanam — to replace him.

The recent shifts are already reshaping Apple’s power structure. More authority is now flowing to a quartet of executives: Ternus, services chief Eddy Cue, software head Craig Federighi and new COO Sabih Khan. Apple’s AI efforts have been redistributed across its leadership, with Federighi becoming the company’s de facto AI chief.

Ternus is also poised to take a starring role next year in the celebration of Apple’s 50th anniversary, further raising his profile. And he’s been given more responsibility over robotics and smart glasses — two areas seen as future growth drivers. 

Further reorganization is likely. Deirdre O’Brien, head of retail and human resources, has been with Apple for more than 35 years, while marketing chief Greg Joswiak has spent four decades at the company. Apple has elevated the key lieutenants under both executives, preparing for their eventual retirements.

At the same time, Apple is contending with a talent drain in its engineering ranks. This has become a serious concern for the executive team, and Apple’s human resources organization has been instructed to ramp up recruitment and retention efforts, people familiar with the situation said.

Robby Walker, who had overseen Siri and an initiative to build a ChatGPT-like search experience, left the company in October. His replacement, Ke Yang, departed after only weeks in the job, joining Meta’s new Superintelligence Labs.

To help fill the void left by Giannandrea, Apple hired Google and Microsoft Corp. alum Amar Subramanya as vice president of artificial intelligence. He’ll report to Federighi, the software chief.

But there’s been a broader collapse within Apple’s artificial intelligence organization, spurred by the departure of AI models chief Ruoming Pang. Pang, along with colleagues such as Tom Gunter and Frank Chu, went to Meta, which has used eye-popping compensation packages to lure talent.

Roughly a dozen other top AI researchers have left the organization, which is suffering from low morale. The company’s increasing use of external AI technology, such as Google’s Gemini, has been a particular concern for employees working on large language models.

Apple’s AI robotics software team has also seen widespread departures, including its leader Jian Zhang, who likewise joined Meta. That group is tasked with creating underlying technology for products such as a tabletop robot and a mobile bot.

The hardware team for the tabletop device, code-named J595, has been bleeding talent too — with some headed to OpenAI. Dye also was a key figure overseeing that product’s software design.

Read More: Apple’s AI Push to Hinge on Robots, Security, Lifelike Siri

The user interface organization has been hit as well, with several team members leaving between 2023 and this year. That attrition culminated in Dye’s exit, which stemmed partly from a desire to integrate AI more deeply into products and a feeling that Apple hasn’t been keeping pace in the area. Another top interface leader under Dye, Billy Sorrentino, also left for Meta.

The hardware side of the design group — the team responsible for the physical look and feel of Apple’s products — has been nearly wiped out over the last half-decade. Many staffers followed former design chief Jony Ive to his studio, LoveFrom, or went to other companies.

Longtime interface designer Stephen Lemay is now stepping in as Dye’s replacement. Cook is also taking on more responsibility for overseeing design, a role that had been held by Williams.

Ive, a visionary designer who helped create the iPhone, iPad and Apple Watch, is now working with OpenAI to develop a new generation of AI-enhanced devices. That company acquired Ive’s startup, io, for more than $6 billion to jump-start its hardware business — setting its sights on Apple’s territory.

Like Meta, OpenAI has become a key beneficiary of Apple’s talent flight. The San Francisco-based company has hired dozens of Apple engineers across a wide range of fields, including people working on the iPhone, Mac, camera technology, silicon design, audio, watches and the Vision Pro headset. 

In a previously unreported development, the AI company is hiring Apple’s Cheng Chen, a senior director in charge of display technologies. His purview included the optics that go into the Vision Pro headset. OpenAI recruited Tang Tan, one of Apple’s top hardware engineering executives, two years ago.

Read More: Apple’s Star Designer Who Introduced iPhone Air Leaves Company

And over the summer, the company lost the dean of Apple University, the internal program designed to preserve the company’s culture and practices after the passing of co-founder Steve Jobs. Richard Locke, who spent nearly three years at Apple, left to become dean of the Massachusetts Institute of Technology’s business school.



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Epstein grand jury documents from Florida can be released by DOJ, judge rules

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A federal judge on Friday gave the Justice Department permission to release transcripts of a grand jury investigation into Jeffrey Epstein’s abuse of underage girls in Florida — a case that ultimately ended without any federal charges being filed against the millionaire sex offender.

U.S. District Judge Rodney Smith said a recently passed federal law ordering the release of records related to Epstein overrode the usual rules about grand jury secrecy.

The law signed in November by President Donald Trump compels the Justice Department, FBI and federal prosecutors to release later this month the vast troves of material they have amassed during investigations into Epstein that date back at least two decades.

Friday’s court ruling dealt with the earliest known federal inquiry.

In 2005, police in Palm Beach, Florida, where Epstein had a mansion, began interviewing teenage girls who told of being hired to give the financier sexualized massages. The FBI later joined the investigation.

Federal prosecutors in Florida prepared an indictment in 2007, but Epstein’s lawyers attacked the credibility of his accusers publicly while secretly negotiating a plea bargain that would let him avoid serious jail time.

In 2008, Epstein pleaded guilty to relatively minor state charges of soliciting prostitution from someone under age 18. He served most of his 18-month sentence in a work release program that let him spend his days in his office.

The U.S. attorney in Miami at the time, Alex Acosta, agreed not to prosecute Epstein on federal charges — a decision that outraged Epstein’s accusers. After the Miami Herald reexamined the unusual plea bargain in a series of stories in 2018, public outrage over Epstein’s light sentence led to Acosta’s resignation as Trump’s labor secretary.

A Justice Department report in 2020 found that Acosta exercised “poor judgment” in handling the investigation, but it also said he did not engage in professional misconduct.

A different federal prosecutor, in New York, brought a sex trafficking indictment against Epstein in 2019, mirroring some of the same allegations involving underage girls that had been the subject of the aborted investigation. Epstein killed himself while awaiting trial. His longtime confidant and ex-girlfriend, Ghislaine Maxwell, was then tried on similar charges, convicted and sentenced in 2022 to 20 years in prison.

Transcripts of the grand jury proceedings from the aborted federal case in Florida could shed more light on federal prosecutors’ decision not to go forward with it. Records related to state grand jury proceedings have already been made public.

When the documents will be released is unknown. The Justice Department asked the court to unseal them so they could be released with other records required to be disclosed under the Epstein Files Transparency Act. The Justice Department hasn’t set a timetable for when it plans to start releasing information, but the law set a deadline of Dec. 19.

The law also allows the Justice Department to withhold files that it says could jeopardize an active federal investigation. Files can also be withheld if they’re found to be classified or if they pertain to national defense or foreign policy.

One of the federal prosecutors on the Florida case did not answer a phone call Friday and the other declined to answer questions.

A judge had previously declined to release the grand jury records, citing the usual rules about grand jury secrecy, but Smith said the new federal law allowed public disclosure.

The Justice Department has separate requests pending for the release of grand jury records related to the sex trafficking cases against Epstein and Maxwell in New York. The judges in those matters have said they plan to rule expeditiously.

___

Sisak reported from New York.



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