Time Was Allowed to Set the Price
A rule cut every tag by 25 percent after twelve days, and nobody was permitted to argue with it. The chain reached $588.5 million in sales and closed for good in 2011.
The Saturday Trip Down the Stairs
You went on Saturday, because Saturday was when the new tables went out.
The stairs came down into a low ceiling and hard fluorescent light. No wood, no music, no chairs.
By eleven the racks were picked over. Women tried coats on in the aisle, over the coats they had walked in wearing, because there were no fitting rooms and nobody pretended otherwise.
Then you found it. A wool overcoat carrying the label of a store that would have asked three times as much.
You turned the tag over and looked at the date stamped on it, and you did the arithmetic. Six more days and the price drops again. Six more days and somebody else is wearing it.
That arithmetic belonged to one store, in the cellar of another store, in downtown Boston.
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The Rule That Replaced the Buyer
Filene's Basement opened in 1909 in the basement of the family department store at Downtown Crossing. Edward Filene built it to clear what the floors above could not sell, then began buying what other merchants could not sell either.
That was the first half of the business. It did not buy merchandise the way stores buy merchandise. It bought other people's mistakes: overruns, canceled orders, closeouts, the stock of retailers who had guessed wrong or gone under.
The second half was the rule. Every tag was stamped with the day the item reached the floor. After twelve selling days the price fell 25 percent. Six days later it fell to half. Six days after that it fell to a quarter, and on the thirtieth day the item left the building and went to charity.
No buyer sat upstairs deciding whether to hold the price on the wool coats. No salesman could be talked into a favor. The two most expensive things in retailing, judgment and unsold goods, were handed over to a calendar.
Thirty Days Was the Longest Anything Stayed
Nothing aged. Every item either sold or left within a month, so the same square footage produced a fresh store roughly twelve times a year.
The rule also did the selling. A shopper holding a dated tag was holding a small bet: wait for the next cut, or lose the coat to the woman one aisle over. The store never had to defend a price that was already falling on its own.
That was why people came back weekly. Weekly was the only way to know what had arrived.
The format left the cellar, spread into the suburbs and down the coast, and by the fiscal year ending in January 1999 the chain ran 51 stores and $588.5 million in annual sales.
When Every Store Learned to Cut Early
Two things changed, and neither one happened inside the company.
The supply of mistakes shrank and moved out of reach. Manufacturers opened outlet stores of their own and sent surplus there rather than selling it off cheap. National off-price chains, T.J. Maxx above all, bought closeouts in volumes a regional buyer could not match.
At the same time the department stores stopped holding their prices. They marked down early, ran sales that never quite ended, and offered the same labels at similar discounts.
The advantage had never been the merchandise. The advantage was being the only place where the price came down on a schedule. Once every store cut prices quickly, the schedule was no longer worth the trip.
The Fenced Lot Where the Cellar Had Been
The original basement closed on September 3, 2007, so the block above it could be rebuilt. The project stalled, and the site sat as a fenced pit in the middle of downtown for years.
The chain went through bankruptcy and was bought out of it in 2009 by Syms, a New York off-price retailer, for $62.4 million. Two companies with the same problem became one company with the same problem.
In November 2011 they filed together, and the liquidation covered 46 stores across both names. The remaining Basements closed by the end of that year, along with the bridal sale the store had run since 1947.
What the Stamp Became
The rule survived, and it survived everywhere. Retailers run markdown software that does what the date stamp did, faster and store by store. Airlines and hotels move prices by the hour on the same principle, that an unsold thing loses value as its date comes closer.
A price that falls on a published schedule tells a customer exactly what waiting is worth. That was the invention, and it never needed a basement.
The bins are gone.
The clock is still running.
