NOVA looks to shut down schools amid financial crisisWhat started as a rumor (late pay checks) has become bad reality added to the assaults of NOVA's recent woes. NOVA is a direct competitor (I know my school is not even David against NOVA's Goliath) of mine and it has not been good to foreigners who come to Japan to teach. Here are some observable signs that NOVA is seriously in trouble:
Major English language teaching chain NOVA is considering shutting down a large number of schools, it emerged on Thursday.
NOVA's income from lesson fees has decreased since the Ministry of Economy, Trade and Industry issued the language school a partial business suspension order over its practices. Because of this, the school is apparently pushing for a turnaround, hoping to cut costs by trimming and merging unprofitable schools.
NOVA currently operates more than 900 schools, but problems with efficiency have emerged.
Officials close to the group said NOVA has already been trimming and merging schools, focusing on unprofitable schools with low student numbers, but in the future the chain will also apply the move to major schools in cities where rents are high and there is more than one school in the same area. As many as 100 schools could be affected.
The language school will reportedly make considerations for students, allowing them to take lessons at other nearby schools. (Mainichi)
- slapped with business restrictions
- no more TV commercials
- no more street campaigns
- closing of a number of schools (kids division)
- delayed payment to creditors
- late pay (Japanese staff and now foreign)
No pay today. They say it will go though on the 18th but who knows. Gee I’m really starting to get a sore throat right about now. Maybe I’ll have to call in sick tomorrow. I might be better off using that time to look for another job. Everyone heard about how the Japanese Staff didn’t get paid on time last month, but I thought that NOVA couldn’t possibly be stupid enough to do it to their foreign staff. We will just leave!!! I urge all NOVA staff to contact their embassy and make an official complaint. If NOVA does go bust, this will have very bad repercussions for Japans image abroad. Surely the government cannot just let this happen?!?!?!?!?! (a comment on japaneconomynews.com)
A recent decline in the stock price following the release of Nova's 2008 fiscal year first quarter financial was preceded by news of a delay in payment of wages and bonuses to some employees. Nova explained that the delay in the monthly wages was due to change in its payment system and personnel management and accounting sections that had not been completed on time and that the summer bonus delay until October was a business necessity that required employee co-operation.  Indications of an impending financial crisis stemmed from a rapid increase in refund claims that total nearly 5,000,000,000 Yen nationwide. An Aug. 21st article in the Tokyo Kezai, Nova was described as repeatedly delaying payment to business partners and banks, falling into arrears for printing costs at the end of July, asking an ad agency to defer a payment. Nova's 2008 first quarter financial showed a loss of 4,300,000,000 Yen, and a %19 decrease in sales compared to the previous year period and overall %19 decrease in reoccurring profit. Nova cited a decrease in the number of students and deterioration of its image as an explanation. taken from wikipedia