Six years following bankruptcy, eikaiwa (English conversation) school chain Nova boosts the brand

Six years following bankruptcy, Nova boosts the brand

BY PATRICK BUDMAR

SPECIAL TO THE JAPAN TIMES

NOV 3, 2013

In September, Tokyo-based Jibun Mirai Associe Co. (JMA) announced it would adopt Nova as its official corporate name — 19 months after it acquired the eikaiwa (English conversation) school chain from its previous operators, and almost six years after its well-publicized downfall. It has been a rocky road for the school since the Oct. 26, 2007, bankruptcy announcement that put thousands of foreign-language instructors out of work (and in some cases out of apartments), even necessitating some governments to intervene and give them assistance.

JMA, now called Nova Holdings Co., is hopeful that things are finally looking up.

“Since the return of Nova, there have been various challenges related to its transformation and return to a healthy, operating business,” a company spokesperson tells The Japan Times. “With a high degree of recognition in the English-teaching business already, we judged now to be the right moment to leverage the Nova company name through reviving it.”

Timing is everything. Nova is reportedly seeing an increase in children coming in for lessons, particularly from a young age.

“Demand for children’s English lessons has been growing since 2011 after English became a required subject at elementary schools,” the spokesperson says.

On Oct. 22, the education ministry also announced it was considering moving up English-language education in elementary schools to an even earlier age, from fifth to third grade.

In September, Tokyo was named the host city for the 2020 Olympic Games, another promising development for the eikaiwa industry. The spokesperson says inquiries for lessons from adults have surged following the announcement.

As for how reinstating the Nova name benefits the brand and company, the spokesperson says there are some advantages from a recruitment perspective.

“Along with a rise in our external financial credit limit, we see this as an opportunity to get many more people to choose to work for the company.”

Those who join the company as instructors now will find the management has changed a few things. For instance, all lesson intervals are now 10 minutes, and some branches have added an extra lesson from 8:50 p.m. till 9:30 p.m.

“A completely new range of adult- and kids-lesson materials has also been introduced, and are a whole lot better to work with than the materials we inherited from the former Nova,” says Thomas, a Nova instructor who asked to be identified under a pseudonym because he wasn’t cleared to speak with the media.

Thomas has been working for Nova since a few years before its bankruptcy. He says the new management’s strategy isn’t much different, though it seems “prepared to make big changes.” He adds that the course is “consistent” with what has been done with Nova since the bankruptcy.

“From what I can make out they don’t want to spend more on instructor salaries than they have to. On the negative side, it seems to be leading to them having trouble recruiting and retaining instructors, which leads to students having trouble reserving lessons,” he says. “However, the new textbooks do make the job quite a bit easier.

“Typically a small branch in 2007 would have four instructors and two Japanese staff members,” he says. “Since then, that’s been how many employees you might expect to find at a bigger school — and not all of them work full-time hours.”

Following the insolvency of the original Nova in October 2007, G.Communication revived the company a month later while retaining the Nova brand. Inayoshi Holdings did the same when it took over ownership in October 2010.

As for what makes the Nova brand so appealing to an operator, the spokesperson says the high level of recognition obviously helps.

One highly recognizable character is the Nova usagi, a pink cartoon rabbit with a beak-like mouth. After making its debut in a TV commercial in September 2002, the Nova usagi enjoyed a high level of popularity that led to the creation of merchandise, apparel and even video games.

“Everyone knows the Nova usagi from past advertising and commercials,” the spokesperson says. “It is almost immediately associated with Nova the English-language school, so we believe it has brand power.”

Even though the pink rabbit character made its debut over a decade ago, and has survived a corporate bankruptcy, the novelty of the Nova usagi somehow hasn’t worn off among students.

Another holdover from the heady days of the original Nova is Super Nova, the U.K.-based car-racing team that former Nova CEO Nozomu Sahashi cofounded in 1991.

The racing team continued to use the company’s branding even in the wake of the 2007 bankruptcy, as it still does today.

Nova’s spokesperson says the company has no involvement with Super Nova, but did not elaborate on how the racing team is able to continue using the brand.

Beyond the name change, the spokesperson says the company doesn’t expect to make any adjustments in overall management or other aspects of the company. Nova Holdings currently operates 336 schools throughout Japan, which is approximately a third of the 924 branches that existed at the original company’s peak in February 2007.

The Nova spokesperson says there are also plans to open more schools in conveniently locations in city centers, and that it is “currently planning to open numerous branches abroad to serve as sites for overseas study.” The company is also aiming to provide lessons remotely, 24 hours a day, to meet customers’ demands.

When Nova shut down in 2007, it had approximately 420,000 students enrolled at its branches nationwide. The Nova of today counts a more modest 66,000 students in its current network. If the company wants to reclaim its spot at the top of the eikaiwa tree, it’s going to have to pass ECC, which boasts 379,267 students (that number includes those studying any of seven different languages on offer), and Aeon, which says it has 100,000 students (an approximate number that includes only those studying English).

Other popular language schools include Gaba (21,300 English students) and Shane (around 20,000 students, a number that includes those studying English and Chinese). There are also the 73 registered English-language schools listed by the Japan Association for the Promotion of Foreign Language Education. Nova certainly has its work cut out.

While it’s true that the eikaiwa industry is not the behemoth it used to be, Nova’s tenacity and brand recognition suggest there’s a chance it can eventually pick up from where it left off half a decade ago.