Nova (eikaiwa)
Nova is a large eikaiwa school in Japan.
It was by far the largest company of this type until its widely publicized collapse in October 2007. Before its bankruptcy, Nova employed approximately 15,000 people across a group of companies that supported the operations of and extended out from the "Intercultural Network" of its language schools. The scope of its business operations reached its peak in February 2007 following a rapid expansion of its chain to 924 Nova branches plus a Multimedia Center located in Osaka.
Nova, known for high-priced lesson packages and later plagued by lawsuits and negative publicity, began to decline in earnest almost immediately after the Ministry of Economy, Trade and Industry placed a six-month ban against soliciting new long-term contracts from students on the company on 13 June 2007. The impending financial crisis facing Nova related to a rapid increase in refund claims, significant drops in sales figures, and deterioration of its reputation, came to a head in September 2007 when Nova began to delay payment of wages and bonuses to staff. The NAMBU Foreign Workers Caucus in Tokyo estimated that up to 3,000 staff had not received their salaries on time. A solution for Nova's failure to pay wages was promised by 19 October in a fax sent to branch schools. On 23 October the Osaka Labor Standards office accepted a demand by unionized Nova instructors to investigate criminal charges against Nova President and founder, Nozomu Sahashi, over delayed and unpaid wages, but Sahashi was ultimately not charged.
It took roughly eight months for the company to reach the point where it filed for bankruptcy protection on 26 October 2007, whereupon the trading of its stock was suspended and was delisted on 27 November 2007. On 6 November 2007 court-appointed receivers announced that Nagoya-based G.Communication would sponsor Nova. Initial plans by G.com were to start with reopening up to 30 schools in various locations including Tokyo and Osaka by the end of November 2007. G.com later sold off its 490 Nova and 167 GEOS English schools on 1 October 2010 to Inayoshi Holdings, with 50 of the GEOS schools slated to join the Nova group under the name "Nova x Geos" on 1 November 2010. As of 1 February 2012 Nova is owned by Jibun Mirai Associe Co. Ltd. On 2 September 2013 Jibun Mirai established a wholly owned subsidiary called Nova and fully reinstated the name Nova.
As of January 2014 Nova operates 310 branches, with 66,000 students. In January 2020, Monogusa introduced the learning app "Monoxer", which will be provided by the company to all school buildings of Nova in the Business Course/TOEIC Course starting in January 2020.
History
The Nova Group was founded in August 1981 and was led by CEO Nozomu Sahashi. Nova's corporate headquarters were in Osaka. The company was the largest employer of foreign nationals in Japan, employing 7,000 foreign workers, 5,000 of whom were employed as language instructors.Each year, Nova hired between 2,500 and 2,600 foreign teachers to replace those who had left. Although instructors were not required to have actual educational training, the company provided a salary bonus for teachers with an accredited TEFL certificate, any master's degree, or a degree in education. Teachers were admitted directly after university graduation with any degree that allowed them to obtain a work visa. Instructors from participating countries who can obtain a Working Holiday Visa were admitted without a degree. They worked fewer hours and earned less pay than full-time instructors.
Sahashi originally established the company with two high school graduates from Sweden and Canada whom he met via a friend who was studying abroad in Paris. They opened the first classroom in Shinsaibashi, Osaka. The name Nova was chosen by Sahashi as he felt it would appeal to prospective students.
In November 1996, Nova's initial public offering was met with several demonstrations in front of Nomura Securities and the Tokyo Stock Exchange. A complaint filed by The Nova Union stated that the company was violating Japanese exchange laws by falsely stating that there were no unions at Nova, nor pending litigation, and that labor relations between the company and its employees were amicable and untroubled.
Since 1997, Nova steadily expanded the number of its schools as its business grew, going from 239 schools to 623 in 2004. By 2002, Nova had captured 50% of total market share by revenue and in 2003, Nova had gained a 66% market share by number of students, some 410,000 students in total. However 2005 saw Nova lose ground in total sales revenue.
The company was in the red in the business year ending in March for the second consecutive year, posting net losses of 3 billion yen in fiscal 2005 and 2.4 billion yen in fiscal 2006 after a failed expansion attempt. The number of students fell to 418,000 by the end of March: down 12.1 percent from a year earlier. On 20 September 2007, NOVA announced it was considering a large-scale closure of up to 200 branches.
Events after the collapse
The announcement of court protection and the admission that operations at all Nova branches would be temporarily shut down shocked the estimated 420,000 Nova students as some of them had paid their tuition in advance and feared their money might not be refunded. The Ministry of Economy, Trade and Industry asked the Japan Association for the Promotion of Foreign Language Education, an industry body, to call on its member schools to accept Nova students. METI also requested consumer credit companies not to seek loan repayments from the 20% of Nova students who paid their tuition with loans because Nova has ceased operations and they could not take lessons.Nova President Nozomu Sahashi, missing since before his dismissal, was officially replaced by three board members, including co-founder Anders Lundqvist. The Osaka Labor Bureau, a local branch of the Ministry of Health, Labor and Welfare, launched a consulting counter with five interpreters for foreign Nova instructors.
The immediate effect of collapse of Nova was the sudden unemployment of approximately 4,500 foreign teaching staff and 2,000 Japanese workers. The desperate situation of many of the foreign teachers raised concerns over an apparent lack of an adequate safety net for foreign workers in Japan. Some teachers could not even afford a plane ticket home. The Australian and British embassies in Japan set up information pages on their websites to assist their nationals and Qantas airline offered reduced airfares for Australian Nova employees wishing to return to Australia.
The collapse led to huge increases in union membership, particularly in NUGW Tokyo Nambu and in Osaka's General Union. The unions had a chance to appeal their case to the public thanks to extensive coverage on TV, radio and newspaper.
The unexpected influx of ex-Nova teachers on the job market led to immense numbers of applicants vying for a much smaller number of employment opportunities. Language education companies, even some outside Japan, attempted to tap into this labor force.
The publicity, generated by the collapse in Japan and in other countries, also threatened to damage the reputation of Japan's foreign language industry although the Japanese government attempted to minimize the damage by pledging non-specific support despite remaining essentially uninvolved in the chaotic collapse. The government did set up a special consultation booth briefly at the Hello Work public employment office in Shinjuku in Tokyo for Nova instructors seeking advice but maintained its distance as its position was that the bankruptcy of Japan's biggest foreign language school chain was a private sector matter.
Although Nova was unable to successfully attract a corporate partner to stave off the bankruptcy, twelve companies quickly applied for sponsorship to rebuild Nova Corp, some of which made specific proposals to turn around the company.
Restructuring
On 7 November 2007, G.Communication, a Nagoya-based operator of cram schools, language schools and restaurant chains announced it had been unofficially selected to take over part of the operations of failed Nova Corp before any official decision by the board of trustees had been released. G.Education Co, a subsidiary of G.communication, would take over part of Nova's operations in addition to the chain of EC Inc English conversation schools of Hokkaido it runs. Nova Corp assets not absorbed by G.communication would be liquidated by court appointed administrators. The administrators claimed they had to select a sponsor quickly even before the court approved Nova's reconstruction program as value of Nova corporate assets were eroding each day as employees and students left.Initial plans by G.communication were to start with reopening the Nova Kurokawa school in Nagoya's Kita Ward with the intention to reopen up to 30 schools in various locations including Tokyo & Osaka by the end of November 2007. G.communication held several briefing sessions for Nova employees and foreign teachers about their reemployment. Although many of the foreign teachers were not subsequently re-employed, G.communication has opened 465 schools as of January 2010.
G.communication Co. sold off the Nova and Geos chains of English schools on 1 October 2010. An investment company led by Masaki Inayoshi, who formerly served as chairman of G.communication, purchased the subsidiary of the Nagoya-based firm that ran both GEOS and Nova. At the time of sale, Nova had 490 locations and Geos 167.
Nova changed ownership again in 2012, being purchased by Jibun Mirai Associe Co. Ltd. However G.communication continues to operate some Nova schools through its subsidiaries G.networks and G.taste, under license from Jibun Mirai Associe.