The recent spate of bad news continues for China’s for-profit education sector. It was reported on August 12 that Wall Street English, once a stalwart of the adult English market alongside the likes of EF, Meten and others, will file for bankruptcy.
A long-term employee of the company told yicai.com anonymously that since the outbreak of the COVID-19 pandemic, the company has started shutting down its centers.
Netizens on Weibo starting using the hashtag ‘Wall Street English will go bankrupt.’ One user, by the name of @大南南南南南南, commented, “Great! It’s a trash school.” Another, by the name of @威廉赵先生, argued the bankruptcy was part of a “trend of out-of-school-hours training centers going bust” in relation to recently announced regulations.
A closed-down Wall Street English center. Image via @第一财经日报/Weibo
The exact reasons why the company filed for bankruptcy are still unclear. Given that offline classes were not possible at the height of the COVID-19 pandemic in China, it is plausible that many of Wall Street English’s centers lost a lot of revenue during that time.
Another suggestion is that new regulations related to for-profit education in China have affected the business. Such regulations target out-of-school-hours training centers for kindergarten, primary and middle school pupils, whereas Wall Street English is largely targeted at adults.
However, yicai.com suggests the whole industry is seeing a “flight of capital,” as investors appear to lose confidence in the sector.
Some may have foreseen the collapse of the company, given recent reports. Back in June, Wall Street English was fined RMB2.5 million by Shanghai market regulation authorities for false advertising. Moreover, some Wall Street English employees said they have not been paid their salaries for three months.
Adult English classes make up a significant part of the for-profit education market in China. Many students see such classes as a means to improve career prospects, study abroad or simply give themselves an extra life skill.
Wall Street English was founded in Italy in 1972 and now operates in 29 countries and regions across four continents. The company entered the China market in 2000.
The collapse of the company’s China branch will raise questions about the future of the English-teaching market in the Chinese mainland. What that future holds remains to be seen.
[Cover image via @一位不愿透露姓名的地理学者/Weibo]