Americans Are Suiting Up Again & Ferrari’s Mocked First EV is Selling Fast

0:01Are you sucking wind from trying to keep up with AI and its impact? Take a breather and tune in to the Intelligence Shift, Morning Brew's new podcast with PwC. It bridges the gap between big picture AI concepts and what it actually means in practice. Host Dan Priest is joined by expert guests to discuss AI's role in sports, music, HR, and more. Listen to the Intelligence Shift wherever you get your podcasts. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Kayla Lopez. Today, ABC pants are out and suits are back in. And would you pay a professional to design your dorm room? It's Monday, August 17th.

0:37Let's ride.

0:42You might know Toby Howell as a pretty good podcast host. Well, I'm pleased to report he is an even better wedding host. It was spectacular. The venue and the people, stunning the speeches, left not a single dry eye, including my own, and the party. Honestly, didn't know Toby had moves like that. One of the best weekends ever, for sure, and made even more special by having our whole podcast squad to celebrate our favorite Toby and his wife. That also means he's out until Friday, so I'm excited to bring you all the news with excellent guest hosts, including Kayla Lopez today through Wednesday. Kayla, thanks for being here.

1:18Yeah, so excited. I have definitely watched the Instagram stories of Toby's wedding, and it seemed amazing. I also need you to confirm on some hard-hitting journalism here. I heard Toby paid an Etsy witch to make sure the weather was good. Is that real? And it worked perfectly. He did. And I think it was the best weather day of the year. Like it was absolutely beautiful. No humidity. And you never know with an outside wedding in the summer. So the Etsy witch, I mean, we will be using your services for more weddings to come. Even if he was going to do the podcast today, I don't think Toby could do it because I called him yesterday morning after the wedding and he just goes, I mean, I couldn't hear him.

1:58He was just whispering. His voice was completely gone. So if you think mine's a little raspy, Toby was just like, we were like, that was such a fun one. He goes, it was outrageous. It was so funny. So Toby, congratulations again on your wedding. It was so much fun. Kayla, I'm excited to do the podcast with you this week. And now a word from our sponsor, Rubric. Kayla, what do you know about cybersecurity? Well, just that Chris from IT says I'm considered a monumental risk. That too. But the truth is the old model of cybersecurity was built on protection, safety nets, recovery plans, systems designed to withstand the last era and maintain the status quo.

2:35It can't hold up in the present day. The AI era demands confidence that you can secure and accelerate your business operations so nothing stops your momentum. Rubrik can give you that confidence. Their platform helps you keep going by securing your data, controlling your AI and protecting your identity built as one architecture, not stitched together after the fact. To learn more about how Rubrik rewrote the industry rulebook, head to rubrik.com slash MB. That's R-U-B-R-I-K dot com slash MB. Step aside, Don Draper, this new era of Mad Men comes with a little more linen. Suits are making a comeback as people start dressing up again.

3:13The pandemic era of work from home brought sweats and athleisure and more formal wear companies definitely felt the pain. But that trend seems to be reversing. While some of the resurgence is due to employees returning to office, a large part of it is simply because people want to wear more suits. Brooks Brothers CEO Ken Ohashi said they're seeing double-digit growth in suits this year, largely due to fashion suiting or more fun and colorful fabrics than your average gray three-piece. Other tailors are also seeing an increase in experimentation and personalization, and this is playing out in the numbers.

3:49Last week, Ralph Lauren reported a 13 % revenue increase for Q2, in part due to strong performance from its inclusive luxury products. Another success, Tailored Brands, parent company of Men's Warehouse, actually filed for bankruptcy in 2020 and closed over 400 stores. But since then, the company has grown as interest in suits has increased, with the company filing to go public in July and reaching sales of$2.5 billion last year. Neil, it sounds like now might be the right time to invest in a pocket square. I could have used one before this weekend, certainly. I'm interested in why people are dressing up again, because we're seeing all these companies like Ralph Lauren and Men's Warehouse just report booming sales, double-digit growth, and seems to be a few factors.

4:34One of them is people are going back to the office more. I know it's 2026 and the pandemic seems in the rear view, but every year that number inches up from 2025 to 2024. The average number of days required in office nationwide was up 9%. We had big employers like Amazon and JP Morgan call workers back to the office last year. And another factor that some people are pointing to, I know this doesn't sound so exciting, but it might be a recession indicator because everything's a recession indicator these days. But dressing up is seen as maybe the job market isn't as strong as you want. So you have to really put out your best self to the labor market, to future employees, employers, to other people you're networking with, as jobs are more scarce, then typically maybe people dress up more.

5:21That's one particular theory. Yeah, you know, they always say dress for the job you want. So it makes sense. Another driver of this formal wear resurgence could be the use of GLP-1 drugs for weight loss. So about 11 % of Americans use GLP-1s for weight loss specifically, and more than two-thirds of those consumers using GLP-1s say that sizing changes have made them more likely to shop in store, according to Reuters. So that could be another boon for these custom clothing providers as people perhaps want to either tailor their existing clothes or refresh their wardrobes as their appearance maybe shifts.

5:58It's crazy to think about the boom and the bust of athleisure too. So as we're seeing the rise in more formal wear, and I can speak to this, I mean, I had three different, My soup bag this weekend was so heavy. And I was like, I'm holding together this industry by myself. Athleisure has just gone. It went parabolic in 2020 to 2023. And then it's fallen completely back down to earth. Like, I don't even know if it's acceptable to wear Lululemons out of the door anymore. You have to put on actual tailored pants. Athleisure, the entire industry was up 40 % in terms of sales from 2022 to 2023. 2023, but then the bottom has completely fallen out from 2023 to 2025.

6:39Growth in activewear was down 7%. I just looked at the Lululemon stock chart. I mean, yes, it goes way up at the beginning of the pandemic, but then it falls way back down. Starting in 2024, the stock is down 75%. We're right now basically at baseline before the pandemic happened. So even as we're seeing the rise in formal wear and people starting to dress up, the the era of athleisure and people wearing sweatpants to work. I am guilty of this has maybe fallen off as people go back to work. People go to more weddings and events because that is the number one driver of the formal wear industry is weddings is number one, back to work number two.

7:18So it looks very interesting trend. It's benefiting a lot of companies like coach, like Ralph Lauren, but it's pretty interesting to see the bifurcation because not all of the preppy retailers are doing that well. J.Crew is not having a good year. Gap shares are down 18%. So people, as they go shop for nicer clothes, aren't exactly doing it at all the places. They're being picky and choosy. And maybe that has to do with some of the marketing and the inventory that these brands are laying out. Moving on, as AI companies and their employees get hella rich from surging valuations, everyone else is going, wait, what about us?

7:53A growing number of cities, states, and federal lawmakers are making a push this summer to force the AI industry to distribute some of its outside profits with a broader American population. The epicenter is Northern Virginia, home to Data Center Alley, the world's biggest collection of data centers. As the New York Times reports, Virginia in June became the first state to slap a small tax on data centers based on their electricity consumption. Because of how many data centers there are, that small tax translates to$600 million in revenue for the upcoming year. Others have floated more extreme ideas like Senator Bernie Sanders proposing the U.S.

8:29government take a big stake in the major AI firms and distribute the profits to Americans in the form of$1 ,000 checks. And it's not just Democrats floating more radical concepts. President Trump, a Republican, has also mused about the government buying a stake in open AI. Chief among the concerns is that AI companies are not paying their fair share when building data centers. Critics say they burden small communities with higher power bills due to their electricity guzzling ways without providing sufficient economic benefits. That's led some cities and states to reevaluate or pause entirely tax incentive schemes that lured big tech companies into town.

9:05Kayla, the pie is growing, but like me with a pizza cutter, it's not being divvied up into equal slices. Yeah, there's definitely a lot of AI anxiety that's driving this. And at the heart, there are really two potential outcomes. The first outcome is that AI creates a huge economic boom. It supercharges valuations for companies and has an estimated$15 trillion of economic output. The flip side of that argument is that if AI doesn't live up to these super high expectations, you could see another dot-com-style bubble burst that could have ripple effects across the global economy. Or it does live up to its expectations, and it comes at the expense of potentially millions of jobs and industries that are inevitably going to be replaced by the technology.

9:49So while we've seen a lot of hype about AI's potential, it really feels like the full impacts of the tech may not be felt for some time. But we're still definitely going to be anxious about it while it's while we're waiting. Yeah, I think the main concern here is what you're seeing politicians respond to is that a ton of people, not a ton of people, a small amount of people are getting very rich off of this in Silicon Valley. These are the employees of OpenAI and Anthropic and Google and these places that are just the valuations are soaring because of AI. But then when it comes to the normal people who fear that their jobs might be taken, that data centers are coming into their communities, they're saying, everyone, people are getting so rich.

10:28But what about us? And this has precedent, actually, many times over. I'm thinking one example is Alaska. So a few decades ago, they struck oil riches in Alaska, and that made the state extremely wealthy. And then they decided, OK, let's actually create a wealth fund that will actually pay out a dividend to the entire population of Alaska because we just had dumb luck here and found oil. And we think we wanted to redistribute the profits of this oil wealth to Alaskans. And so they do have this thing called an Alaska Permanent Fund dividend. then it pays$1 ,200 for eligible resident in Alaska. So there's precedent, there's history, there are examples of states and communities seeing huge revenues like they are some of them with AI and distributing it back to the people.

11:19Not everyone thinks is a good idea, but proponents of more redistributive mechanisms can point to certain examples in history and say, look, when we found huge wealth, when we generated huge wealth, There is a precedent of us divvying it up to the people. Yes. And although that feels like maybe a very far-fetched or long process to create something like a sovereign wealth fund, there have been more smaller efforts to potentially impact regulation, specifically of data center development. So over the past two years, about 120 communities have considered or adopted data center moratoriums, including New York, which in July was the first U.S.

11:59state to enact a one-year pause on permits for facilities that consume more than 50 megawatts of power, specifically for AI data centers. So it does seem like although there are these big, you know, idealistic solutions that are on the table, there are also smaller things that companies are that that communities are doing now to try and be a little bit more in control of where and how AI is developed. Right. Well, there's one thing to tax a data center and generate 600 million dollars as Virginia did, or it's to posit entirely. And some proponents of AI and economic development say, guys, what are we doing here?

12:37Like, this is a huge economic boon to your region. Why don't you recruit tech companies, build data centers, create jobs and then tax them and then you will get rich and then you can redistribute it to your population. There was a very funny exchange on Twitter that I saw. So the former DNC co-vice chair David Hogg said against data centers, he said, if data centers are so essential to our national security and economy and have such amazing benefits, they should prove it by building them in the richest zip codes in America first. There was a community note on this by saying the richest county in the U.S.

13:11by median household income is Loudoun County, Virginia, which is also the home to the world's largest concentration of data centers. So a little pushback to the criticism of data centers there. And some states have done certain things like Louisiana, a parish there, gave a big bonus to public teachers in a particular parish. There are counties there and a parish where there was a lot of data center riches. So this is a complex issue that's going to be only more relevant as we head into the midterm elections. It's not just at the federal level, but it's mostly at the local and community level about how do we extract more wealth from all the AI companies that are getting rich from putting data centers in our communities to uncertain economic benefits.

13:54Welcome to Winners of the Weekend, the segment where Kayla and I pick two things that would have torn up the dance floor at Toby's wedding. My winner is Ferrari, whose electric vehicle everyone made fun of is getting the last laugh. Over the weekend, a bespoke model of Ferrari's Luce, its first foray into EVs, sold for$40 million at a charity auction event, making it the most expensive vehicle ever sold. The ultra-wealthy buyer, identified as billionaire investor Herbie Wertheim, isn't the only one who wants this car in their driveway. A few weeks ago, Ferrari said that it had already hit its sales goal for the Luce this year, selling 500 of the cars in less than a month.

14:32Maybe these swanky Italians do know what they're doing. In May, Ferrari announced its first EV, the$640 ,000 Luce, which was the brainchild of Johnny Ive, the former head designer at Apple. Excitement quickly turned to horror when it was revealed, bearing little resemblance to other Ferraris and generally getting roasted across the internet. I mean, it has four doors. That's basically treason. But turns out online mockery didn't extend to the real world where the Luches are being gobbled up, particularly by buyers in China. Kayla, I'm trying to think of another example of a product so widely mocked upon release that proved social media wrong in the end.

15:10Maybe it was another Johnny Ive design, Apple's AirPods. Yeah, I mean, this really just goes to show that no matter how many people hate on you online, there's probably somebody willing to spend$40 million on your product. So perhaps it's just a different market. But this really does come amid a pretty tough market for EVs generally. after President Trump eliminated the federal tax credit for EV purchases last September, new EV sales have slowed dramatically. And just this last month in June, new EV sales fell 28 % versus last year, and EVs accounted for only 5.4 % of total new vehicle sales in the U.S., which is down from May, according to Cox Automotive.

15:51However, I don't know if the introduction of this new Ferrari model is going to impact the market too much. The average electric vehicle price is currently$55 ,000. So a car priced at more than 10x, the average probably won't make a dent. They're selling 500 of these. And they're like mission accomplished. It's a very, this is Ferrari's business model. We're going to sell just a few hundred cars at an insanely high price point. And that's enough because this is just for collectors. But I know it's worth going back to May when they introduced this car. And I've never seen something that was so widely panned online.

16:27Maybe the last thing I can think of is the Jaguar rebrand. But the stock actually fell 8 % on that day. You had the former president of Ferrari coming out and basically disowning it. He's saying they should take that prancing horse off the car. This is definitely a car that at least the Chinese won't copy. So it was a huge fiasco. Then you have a few weeks ago them coming out and saying, we actually hit our goal of 500 cars sold this year. We're on pace to hit our 2030 goal. it's definitely an interesting realization that the online mob is not necessarily reality, especially when you only need 500 people to buy your car for it to be a success.

17:07And I think you got to look at who was Ferrari marketing this to. It's not to the chattering classes on social media. It's to high net worth buyers in China for new millionaires and billionaires in Silicon Valley who have gone rich off of AI. These are people who like EVs. Their first car was an EV, and they want to show and display their wealth. Instead of getting a traditional Ferrari or traditional Lamborghini, they just have different sensibilities. And I think Ferrari really understood this well. And you have a lot of analysts like Scott Sherwood, who's an independent analyst of luxury car brands, saying Ferrari's marketing and customer insight are on another level versus a lot of their competitors.

17:46So a lot of cars are not going to sell, actually. It's the only car that has ever sold for$40 million, but it looks like it's proven the haters wrong. Yeah, and thinking about designer Johnny Ive, obviously best known for his time at Apple designing the iPod, the iPhone, and as you mentioned, the AirPods. But what's he really been up to since leaving the tech giant in 2019? Well, he's not only worked on this new Ferrari car design, but has also reportedly been working with OpenAI to create an AI hardware device. And some new information just came out about that this month. Supposedly, it looks like a donut the size of a hockey puck.

18:21Not sure exactly what that's going to look like or what it's going to be, but let's see what the reception of that product is. And maybe let's wait a little bit before we judge. Good point. All right. Up next, dorm rooms get a glow up. Neil, let me tell you something about bond markets. I'm all ears. They are confusing. Insightful as ever. But, yes, capturing value in fixed income is not easy. Thankfully, Vanguard bonds are institutional quality. That means top-grade products across the board. Vanguard is able to invest across all kinds of sectors, maturities, and geographies, which means they can spot and act on opportunities that others might miss.

18:59So check out Vanguard.com slash audio. That's Vanguard.com slash audio. All investing is subject to risk. Vanguard Marketing Corporation Distributor. Pros, find the right flooring for the job in Lowe's newly redesigned flooring showroom. Shop our expanded assortment of trusted brands and get up to 35 % off style selections, Stain Master, and Stain Master Pet Protect special order carpet. And while you're here, save$100 on a DeWalt 20-volt max 6-amp hour 2-pack of batteries. Now just$179. Get more of what you need faster and save more where it counts from the ground up. Our best lineup is here at Lowe's.

19:35Ballot to rate 26 while supplies last. Selection barriers by location. Neil, when you need new running sneakers, is an AI agent placing an order for you? You're the Gen Z one here, Liv. Wouldn't you be more likely to do that? Fair point. But it is becoming increasingly common. Agents are comparing products, evaluating inventory, and completing purchases for customers. An IDC study sponsored by WooCommerce found that open-source platforms give e-commerce brands more freedom than SaaS to optimize for agentic commerce. That can mean more sales whether the buyer is a person or a bot. Check out the study at WooCommerce.com slash trends.

20:10That's WooCommerce.com slash trends. My winner of the weekend is dorm room designers who are charging parents as much as$20 ,000 to turn shabby dorm rooms into personalized havens. If you've ever stepped into a college dorm, you know that there's room for improvement. But these over-the-top interiors range from monogrammed bedding and wallpaper to chandeliers and custom wardrobe build-outs. While this trend may feel like it's right out of the Bama Rush documentary, this is hitting all across the country. One dorm designer in the Northeast said that almost all of her clients are from out of state, preferring to pay their team to outfit a room instead of shipping items to campus or figuring where to park their rented van on cramped streets.

20:54While some say this is a great way to show new college students a place that they feel is their own, others feel like this is capitalizing on the emotional moment when parents drop kids off at college and that roughing it is actually a part of the college experience. Neil, my dorm had a framed photo of a shirtless George Costanza. So I'm not exactly the arbiter of taste here, but would you spend$20 ,000 to get the dorm room of your dreams? I will say, thinking back on now, I probably could have used a professional. Yeah, I didn't have a shirtless George Costanza, but I did have that, you know, John Belushi in a college sweatshirt, drinking whiskey, like a Jimi Hendrix poster, Dave Matthews poster, Muhammad Ali standing over Sonny Liston.

21:36And so, I mean, you're 18 years old, you're going to college for the first time. The part of this is understandable, but there was a lot of backlash to this online. Not backlash, but some haters got going. One said the best business model going on in this country in any industry is convincing people with disposable income that they need something that is completely unnecessary. And then another said, if you aren't sending your kids to college with a used futon, a hamper, and a few posters, then you aren't preparing them for real life. So that's maybe the more salient criticism is that you got to go to college.

22:07You got to figure things out for yourself. And one of them is designing your dorm. And even if it looks bad when you're 18 or 19, that's okay. Because perhaps you're learning something. Obviously, there is a market for this. So you see a lot of moms, especially, who went through this with their own children saying, whoa, my stuff got a lot of buzz online when I posted it on Instagram. Why don't I become a dorm influencer? Start selling packages for$25 that you can download. and here's a blueprint. Or you can be like Shelly Gates, who was in this viral TikTok that went all over the internet saying, okay, actually, I will do everything for you.

22:41You want more of the upscale version, I'm gonna charge up to$20 ,000. She has about 35 dorm rooms this fall going on. So just do the math, 20K times 35 dorm rooms. That's a lot of money for just designing someone's college dorm. Honestly, not a bad business model. And when you think about this in the context of the actual price of university, the average public in-state tuition last year hit a little over$11 ,000 and out of state for public universities, 25K, and private universities are nearly$45 ,000. And this is even before factoring in housing, food, and other costs. So adding a ton of costs on top of an already costly experience, I think is pretty mind-boggling to me.

23:26Also important to note, So trends change, and I cannot imagine that the people that are spending$20 ,000, even though Shelley Gates of this design firm does say it's a four-year investment, I have a hard time believing that these kids are going to use all of this stuff for all four years. But it is a trend that is only increasing. We had TaskRabbit data reported by Axios that dorm room move bookings were up 36 % in May nationwide. And I know you said this is happening nationwide, and it is, but it is hard not to think of Rush Talk at Alabama and dorm room designs in the same sentence. Feels like this is really concentrated in the South, in those SEC schools who, with their Rush Talk videos and with their fancy dorm designs, are kind of driving a lot of the college culture right now, which has been pretty interesting to watch.

24:19Like the center of gravity of what is the quintessential college experience in America has maybe moved from the Northeast to the Southeast. All right, it's Monday, so here's what you need to know to stay ahead in the week ahead. The United States and Canada are locked in tense negotiations to avoid a tariff deadline early Wednesday. At midnight, the U.S. will impose 50 percent tariffs on Canadian goods like hockey sticks, wine and cement unless a deal is reached. It looks like a deal could be reached, with Canada reportedly set to offer trade concessions in exchange for Trump not going through with the tariffs, which he said was in retaliation for Canada's unfair treatment of American goods.

24:55Yeah, and if this sounds familiar, it's because it is. In the past 18 months, there have been many rounds of tariff negotiations between the U.S. and Canada, with the U.S. imposing tariffs on industries like auto, timber, semiconductors, steel, and then Canada imposing retaliatory tariffs back on the U.S. But, I mean, hockey sticks and wine? It sounds like this is a pretty good opportunity to binge heated rivalry before it gets a little more expensive. Yeah, I actually haven't seen it. I need a person to watch it with. I don't think I'm going to watch it with myself. Fair enough. I have seen it.