The Legibility Trap
The structural state in which, once distribution density crosses a critical threshold, the cognitive barrier to understanding a brand collapses — and the scarcity that depended on that barrier collapses with it.
Mechanism
The trap is most dangerous in its early stage, because it looks like success. Distribution expansion drives revenue growth that masks the fact that pricing power is already being diluted, until discount dependence and acquisition cost rise together and the market realizes the problem was never cyclical.
Registry Evidence
Post-Alessandro Michele, the brand over-expanded PL through commercial collections while losing narrative opacity. Gucci revenue fell approximately 24% in H1 2024; Kering group revenue declined 11% for the full year.
PL crossed the 7.5 red line following aggressive distribution expansion; three consecutive profit warnings over eight months preceded a CEO change. (Burberry's subsequent recovery, driven by a deliberate 35% wholesale-channel cut, is a distinct governance pattern — not part of this definition.)