Maltese language school chain EC has acquired Embassy English from pathway giant Study Group and closed all year-round centres in the UK, US and Canada.
Embassy had not made an operating profit in the UK since 2014, according to accounts for Embassy Educational Services, lodged at Companies House. Demand for large student discounts, on top of agent commission rates of 30 to 40 per cent, may have played a part in its financial troubles.
In early 2016, David Leigh, then CEO of parent company Study Group, complained of heavy discounting in the market. In the same year, Embassy discounts went as high as the 40 per cent offered by one Colombian agency, while Embassy UK’s losses soared to over £4 million, according to company accounts.
In 2017, Embassy closed language schools in both the UK and the US and losses fell. Agents’ demand for discounts, however, continued to take its toll. In September 2017, Embassy launched a new price structure aimed at ‘moving away from … discounts’, according to company marketing documents.
Shortly before going to press, Gazette research found one Russian agency website, smapse. com, still offering a 25 per cent discount, ‘at all schools Embassy English’.
EC English Holdings, Malta, took control of the UK company on 30 November, according to papers filed at Companies House. The Australian company was acquired on 19 November, according to Bloomberg.
In all, eight schools were closed in December. No figures on job losses have been released but, in an interview with the PIE News website, EC chairman Andrew Mangion estimated that 50 per cent of Embassy staff had been retained. Mangion stated that Embassy schools in Australia and New Zealand would become EC centres. Embassy Summer would retain its name and operate in the junior vacation market alongside EC Young Learners.
Confusingly, on 13 February of this year, all Embassy year-round schools still appeared on the Embassy website. Contacted by the Gazette, the UK Advertising Standards Authority, which regulates companies’ claims on their own websites, confirmed that, ‘the advertising of courses that do not exist would, of course, seem to be a problem.’
The position of Embassy staff also remains unclear. The Gazette has been unable confirm the number of staff transferred to EC. We have no information on numbers employed in the US or Canada, but during the year ending 31 December, 2017, Embassy UK employed 175 people, of whom 131 were teachers, according to company accounts.
Sources in one UK school confirmed that no teachers at the centre were retained, although some were reportedly encouraged to apply for jobs in Australia. Some administration staff are thought to have been offered posts.
The Gazette contacted EC for confirmation of the information given to the PIE by Andrew Mangion. Asked to name the schools closed and the number of staff retained, an EC spokesperson stated, ‘We have closed some Embassy schools, and we have retained certain Embassy staff globally.’ They did, however, confirm that both Embassy Summer and EC Young Learners would continue to trade under separate names but under the same ownership. Asked to explain why Embassye nglish.com was still promoting schools which had been closed, EC told us this was on their priority list but offered no further comment.
