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A Market in Decline
When the largest English conversation school goes under, it has a ripple effect.
The Japan Times
Revenues in the foreign-language school industry fell more than 40 percent in September from the previous year because of the downfall of industry leader Nova Corp., government data indicated Thursday.
Total revenues at the schools, which mainly teach English, slid 43.3 percent to ¥7.32 billion, falling for the ninth consecutive month, the Ministry of Economy, Trade and Industry said in a monthly services industry survey report.
Granted, these figures are for all foreign language schools, but since Nova was such a dominate player, as Nova goes, so goes the market. The METI statistics say revenue has fallen for the past nine months.
All of the pertinent statistics can be downloaded from here [the data is in Excel files and has notes in English. Scroll down to 外国語会話教室, the fourth item from the bottom of the list]. Let's start from September 2006 and work our way to the present.
September 2006: ¥12, 898,000,000, a year-on-year decline of 8.7%
October 2006: ¥9,021,000,000, a YOY drop of 4.9%
November 2006: ¥12,195,000,000, a YOY increase of 46%
December 2006: ¥10,488,000,000, a YOY increase of 16.6%
January 2007: ¥10,271,000,000, a YOY decline of 22.7%
February 2007: ¥10,751,000,000, a YOY decline of 37.7%
March 2007: ¥13,742,000,000, a YOY decline of 5.9%
April 2007: ¥6,656,000,000, a YOY decline of 35%
May 2007: ¥6,627,000,000, a YOY decline of 24.5%
June 2007: ¥7,508,000,000, a YOY decline of 18.4%
July 2007: ¥7,168,000,000, a YOY decline of 20.6%
August 2007: ¥7,485,000,000, a YOY decline of 28.6%
September 2007: ¥7,317,000,000, a YOY decline of 43.3%
We know what did Nova in: a poor business model and Sahashi running the show by himself. Trans-Pacific Radio's latest BizCast fleshes out the problems with Nova and eikaiwa in general, in some more depth.
Some of the ground they cover: loss of consumer confidence, Nova's broken business model, poor quality control, and questionable management. Discussion of the eikaiwa market takes place in the last 20 minutes of the podcast and starts at around the 38-minutes mark. It's definitely worth a listen.
Comments
Nova's piss poor management
I just today asked a J-friend of mine about Nova, and what the average Japanese person thought about it.
He explained to me that a few years back, his mother had asked a friend about Nova, and her friend explained about how poor the management was (pretty much in general, I believe).
He went on to say that it really is not much of a surprise that Nova failed, it was just a matter of time. Most Japanese people knew about how bad Nova was - not necessarily the specifics of the individual teachers, but about the company in general.
Luckily, my friends here don't seem to judge me for it - that I worked for Nova is/was just a technicality. I often wonder if they were presented with an opportunity similar to Nova (teach Japanese in a foreign country), whether they would take it or not.
He also told me of a rumor that Yamantaka Eye (of Boredoms fame) might be living in the small town I'm currently living in. Awesome!
Was NOVA's loss included in
Was NOVA's loss included in those figures?
I am friends with a good amount of english school owners and managers of small and large chain schools and they all say the same thing, sales are way down. Which leads me to believe that eikaiwa market will lead to one of two directions
1-NOVA more or less killed the eikaiwa market and this is just the beginning of a deep downward slide
2-NOVA started a downward slump that will hollow out the market, a lot of schools can't continue like this for much longer, after many schools close the slump will reverse and because of the decrease in competition the remaining schools will profit nicely.
I haven't a clue as to which yet, I think we'll know by March, also what will be interesting is how the overall supply of teachers reacts to the all of this, will they start to head to different asian countries (Korea,China,Thailand,ect) , if that happens it will put upward pressure on salaries and prices, how will the market react to that?
The Market
It will be fascinating to see what happens with the new branches GComm are opening up in the next couple of weeks... Will new customers show up, will the old customers come back... I think it'll be fascinating to see if GComms new lesson system which they put on their website with only monthly payment plans will have any effect...
Looks like Japan continues to crumble...
So:
1. Thousands of foreigners have become unemployed.
2. The Japanese appear to be caring less about speaking English.
3. Japan is enforcing the scanning and (potentially permanent) storage of the fingerprints of all foreigners that come into the country.
4. Japan's population is sharply declining.
5. China's and Korea's economies are booming.
I can't wait to see where this country stands, economically, in 10 years time.
Go Japan! I suppose this is where the stubborn, arrogant "way of the Samurai" gets you.
Bushido
I really think Bushido is misplaced in the corporate sector. Before the Meiji restoration merchants were (i think appropriately) placed at the bottom of the social hierarchy. Now it goes without saying that merchants run the show, as in western countries. So many of them are proving to be unworthy of Bushido ideals, but they have used those ideals very effectively to garner loyalty from the ordinary Japanese men and women who work for them.
I think in most western countries people don't have such a great deal of loyalty for a company unless it has been earned. Generally you do your job and get your pay, and if your company does something illegal or immoral you might be more inclined to blow the whistle.
Bushido does have a place, but perhaps not in corporate japan.
General Problem
Oh please, this isn`t just a problem with Nova. The majority of companies are seeing profits falling in Japan. It is the a few of the big multinationals that are proping up the country. Nova`s management was shit as is the general practice in Japan. The don`t question bad decisions made by higher ups,they don`t think twice about over staffing, the borrow massively with no hope of repayment. Go into your local bank or city office and ask yourself how it continues to function when so massively overstaffed.
Most companies in Japan couldn`t conduct profitable business if it fell on them!!
decline?? all schools??
I work in a small school, 3 teachers and full schedules.
we have been slowly increasing for the past few years.
we moving location to a larger building and have
recieved ex-collpsed school students as of late.
large school loss.
small school and private sector gain.
for all collapsed school teachers, they should have
picked up many private sudents.
Right On
Fucking A!!!
I hear you man. These dumb bastards dug their own grave.
Decline? Not Here. . .
My school has been getting boatloads of new ex-NOVA students since September, when the smarter ones started to see the handwriting on the wall and began jumping ship from NOVA. We're doing better than we've been in several years. There is some decline in the general population of people studying English (fewer children, and the rise in popularity of Korean and Chinese studies are contributing factors) but the collapse of McNOVA has done the smaller schools a BIG favor! And taken a lot of the bottom-feeders out of the teacher-market, as well. . .
for myself
I have a small school myself (I'm the only teacher)! The last month has been great for me. I am at the point were I will either have to start turning away students or hire a teacher.
On A Happy Note
naturally things are looking bleak..but bit the bullet and resigned today, my old HT was there and it was cool to resign officially to him, cuz he wasnt a prick like SOME FOLKS still creeping around the Osaka office...so now I can get UI started. (evidently that "resignation" from nova at the big meeting was just a technicality for G-Con to hose us..I mean hire us)
went to dole office,..they were helpful as!!!...really really super friendly and nice...made my day! the Umeda office..totally helpful..I didnt have all the papers from Nova yet naturally, but I was able to start the paperwork, so I wont be 2 hours there next time. They had 3 workers helping me through the entire process, and the lady was very good at English, so no worries. You should make sure there are translators there when you go though to be sure.
I shoulda done it 3 weeks ago...but evidently I was still employed by Nova/G-com?...anyone got a line on that?..when do we stop getting that 80 percent wage protection uh thing?...meaning To What Point Do They Stop Counting Us As Employed?..i guess for me thats today...so..will i get 80 percent for sitting on my arse yesterday making Black Pesto Lemon-Chicken Risotto?
G-Con is a big diversion i think..has ANYONE really done any work for these clowns yet?..or seen any cash?
Hey Anonymous!
you could hire meee!
i dont work for food though, you could never afford to pay me what I make.
decline?? all schools??...for myself ... Anonymous you are....
Bullshitting!
I BELIEVE HIM
I also have taken students from Nova under my own wing and called it a school of sorts.... though, not official by any means BUT I haven't gotten to the point to where I would turn away students. That would be foolish... especially at the rate that I'm charging... just enough to pay rent and get food on the table at the moment.
Anyways, I am wondering how many people have been requested their separation notices and have applied for UI under the condition that they can get UI soon, not the 3 months for voluntary resignation.
Or 3) People will forget
Or 3) People will forget about Nova in a few months and business will be as usual.
Right now Nova is really in the spotlight in a drastically negative manner. Pretty soon a new problem will come up... maybe back to the "ZOMG BULLIES, WATCH OUT" or "SUICIDES INCREASE" or "HIKIKOMORI IS TAKING OVER". Once the classic examples get back in the spotlight, people will forget about Nova and continue taking English conversation classes out of interest and necessity for work.
Just because Nova was extremely poorly run and Eikaiwa is really loaded with crap.. it doesn't change the fact that if a person wants to be successful, they most likely will have to learn English at one time or another to do international business.
--Oh yeah, and I'd just like
--Oh yeah, and I'd just like to add... No matter how bad Eikaiwa is, it can't even come CLOSE to comparing to the load of crap that the public education system gives as a foundation for English learning. God, all the ALTs are really the ones who should be criticized. Heck, now I've become an ALT and feel like I'm doing literally *nothing*. I mean, I teach 1-2 lessons a day and even the Seniors are so unmotivated that 90% of them are listening to music or have their head down all day. Eikaiwa is infinitely better than the crappy "English education" the kids get at high schools.
I actually want to go back to Eikaiwa, because I felt like I was able to make more of a difference and actually *help* people. Teaching at this public school as an ALT is the must unrewarding, crap-packed excuse for a job I've ever had.
Same crap as before
Totally agree with canadiajin, I will resign next Monday after the union's meeting, just in case they got something new from G-com. or the trustees. G-com. have so far shown to be just as bad as the previous management: empty promises, total lack of information and possibly, complete disorganization. They organised the meeting on the 10th to show themselves as the good guys in front of disgruntled instructors and the media. Jobs and salary for everyone soon, did anybody hear from them since that meeting? Personally I've had enough of all this crap and don't see any future for this new company, given the fact that there are still people like Lundqvist (or whatever is called) and other arseholes apparently still in charge in Osaka.
Contacted by GComm
Has anyone who took the offer to "work" for G-Education been contacted?
I eventually reluctantly sent in the papers but had not heard much since. This past week I was contacted by former middle management of NOVA. They did not provide much info but asked if I had questions. It was pretty useless since most of the time the answer was I don't know or I'm not sure. I got contacted by another middle management of G-Education this time....BAD F*CKING NEWS ALL...THEY ARE NOT...I REPEAT ARE NOT GOING TO PAY US LIKE THEY SAID AT THE MEETING...until we sign a contract and report to work. The supposed couple of weeks we would be paid "if we work or not" for the middle/end of November is a F***ing MYTH.
G-COMM / G-EDUCATION (whatever the hell the name of the "sponsor" is) are a bunch of LIARS!!
Yes some people have been contacted
Potential GCom Drone,
Yes you are right about people not being paid for the period between the 11th of Nov. untill the 20th which seemed to be what was said on the 10th. I`m just an instructor(drone) and don`t know what has happened in upper management and don`t want to give anyone false information. I was called in to work today but wasn`t actually given a contract ( told there were too many mistakes in the English text) and that it would be available early next week. I am hoping for the best because I have a family here. The information I was given today was that people made a mistake about when they would be paid, but anyone who was actually at the meetings knows what was said and what was on the forms that we signed. Today I was told that since I signed an agreement today that I would be paid from today;to be deposited on the 5th of Dec. Up until the 22th of Nov.( my last day with OLD NOVA)would be covered by the government at 80% but OLD NOVA has to declare bankruptey so I may never see that 700,000 yen for Sept. Oct. and Nov. I know alot of people are angry and that there are many people out there who aren`t sure about their next meal. I`m really sorry that I can`t give you more information. Hang in there and good luck.
being paid while waiting to work for Gcomm
concerning getting paid or not for the time we have been waiting at home for a phonecall from Gcomm., i think what is going to happen is that we will get paid, but not in the form of a salary from Gcomm., as many of us have been expecting, but in the form of unpaid wages, which will eventually come from the government, once old nova has been officially and completely liquidated, and the trustees have organised all the necessary paperwork. so the collective sum of unpaid wages we are entitled to would amount to 80% of 2 months of unpaid wages prior to nova's bankruptcy and 80% of unpaid wages for the period of limbo from october 26th until the day we actually start working at one of the newly opened, or soon to be opened branches. that is how i read the situation. i'm not completely sure that this is correct, but it's what i think is going to happen. if anyone can shed some further light on this, please do so.
Salary from Oct 26th
The way I read it (but I could be wrong) from the latest Q&A for Japanese staff on Nova's site (which no-one at Nova has bothered to translate into English yet of course) is that we are only getting the "available to teach but not actually teaching" rate of 60% of our salary (as we used to get when lessons were cancelled due to typhoons for example). But from the government we only get 80% of that 60%. So we are only going to get 48% of our proper wages from Oct 26th until whenever we quit/start GComm/are fired by dead Nova. Not fun, and not what we were told by GComm. A couple of other threads I've read elsewhere indicate the writer has been told the same thing as the above (like the guy at http://gcommnova.blogspot.com/). Hope this is depressingly useful.
Twilight Zone
thanks for your depressingly useful information...lol.
so let me get this straight. in my case, I get 80 percent of full wages for september, and october (until the 26th)
after which time i am getting 48 percent of full wages until i quit, which was thursday for me.
is that what you are saying?
if so, its still gravy..just kinda thin and watery.
That's what I think...
Yes, that's what I think, but like everyone else I'm basically starved for information and haven't been contacted by anyone since the meeting on the 10th.
thanks for that twilight zone
it would be nice to get a straight answer sometime..i bit the bullet and quit cuz god knows when/if/maybe we are working/gettin money...(plus i got a part time gig i'd have to quit to practise "Poster 101" uh..thanks nae)
UI is a sure thing..(and they were really nice and helpful, not at all resistant to gimme my cash, or overly-burecratic or anything) its my money..i paid into it..so gimme it back..it might not get here in time for xmas...(shoulda done this weeks ago) but at least i will be good to go in january..and surely to gawd therell be coffee and jobs for everyone by march.
if not, the worst of winter in Toronto will be over by then...
That's right
Toronto!
Last time I checked, that's not actually in Scotland.
Huh?
Does the decline in Eikaiwa include the lost revenue from Nova?? If so then those numbers are meaningless. Japanese people are still going to need to learn English, all this does is (hopefully) get rid of a lot of losers who walked into their nearest Nova and were swindled into signing up for something that they actually had zero interest in in the first place. I teach at Berlitz, and we are about to finish the best year ever, which will result in bonuses to all employees some time in the new year. Nova fucked up, plain and simple; but if a company is able to handle their shit and look after customers, there is still a HUGE market in this country.
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