The schools in Brighton, Greenwich, Cambridge, Hastings, San Diego, New York, San Francisco and Toronto will close.
“We do feel that discounting has got to a stage where ultimately it’s hurting organisations”
Embassy’s schools in Australia and New Zealand will be rebranded as EC and Mangion acknowledged that the chance to take EC into Australasia via one acquisition was one of the motivators to pursue this deal.
“This [acquisition] allowed us to go in in one shot, rather than piecemeal acquiring school after school,” he said.
“That was certainly one part of the logic – a second part was that we’ve long wanted to acquire a solid junior player, ideally a global player, but definitely somebody who was strong in the UK. Again, Embassy Summer and Embassy Academy represented that.”
Embassy will retain its brand in its junior operations. “I still have a lot of respect for the Embassy brand; for the foreseeable future, we will be keeping the Embassy brand alive for juniors,” added Mangion.
The seismic news of the integration of two of the industry’s large ELT chains has settled, but job losses are an inevitable outcome.
However, Mangion confirmed that at least half of all Embassy staff had been retained after a period of consultation over how to merge both operations – largely in Australia, New Zealand and head office.
“We’ve been through a few weeks of real sort of tough and painful discussions with team members around the world,” he related. “And it’s not been easy. I really would like to think that our team have been respectful, that they’ve been empathetic.”
He said that comments received from those losing their jobs indicated that the process had been conducted thoughtfully and with care.
“We are saving a majority, more than 50% of jobs are being saved in this company,” Mangion related. “So I don’t look at this as losing 40% of the jobs, I look at this as saving 55% or 60% of the jobs.”
Mangion grew the EC business portfolio after taking over one Maltese school that his mother originally set up, expanding via acquisition to the point that the EC chain is teaching 40,000 students per year (Embassy English was catering for around 20,000 annually).
Consolidation among similar ELT businesses may well be of longer-term benefit to an industry that is being squeezed by stagnating demand for some popular markets such as the US and rampant discounting.
“We do feel that discounting has got to a stage where ultimately it’s hurting organisations,” said Mangion. “We need to start questioning the sustainability of this [practice].”
“Now do I actually believe that just because we’ve acquired Embassy we can sort of corner the discounting market? Of course not. It would be completely unreasonable. But if we can do something to reduce supply on the markets and in certain key destinations where we operate [we can] hopefully slowly start to turn the wheel around so that you know it’s not always a downward movement.”
He continued, “Prices can be dynamic. They can go up and they can go down, as they do in the hotel industry, as they do in the airline industry, depending on when there is demand and supply.”
“I think we can come back to being a healthy industry – and I want to see this industry survive and thrive and flourish.”