Abrupt Closure of Non-Academic Training Centers Raises Questions

Gymboree, My Gym, and Little Musician are some of the companies experiencing difficulties.

Hundreds of families in central China’s Hubei province have been scrambling to get refunds from a well-known early childhood education franchise that shut abruptly overnight this week, raising questions about the sudden closure.

Parents in the city of Shiyan told Sixth Tone that they found the local Gymboree Play & Music center vacant on Wednesday, indicating that it had shut without providing any information. They said the center had been open until the previous weekend and parents were being encouraged to prepay for classes at discounted rates.

A mother surnamed Chen said she paid over 10,000 yuan ($1,500) for 70 classes for her child just last week. She added that there were around 200 parents in an online chat group discussing how to get refunds, some of which were as high as 20,000 yuan.

“Their sales staff were lobbying us to prepay for additional classes at discounted prices,” Chen said. “I had no clue that they could run away so quickly. Based on what had happened in other cities, there’s basically not much chance of getting our money back.”

Gymboree Play & Music was founded in the United States 45 years ago — it was sold to a Chinese entrepreneur in 2016 — and specializes in educational activities for children up to the age of 5 and has franchises worldwide. There are nearly 600 Gymboree centers in more than 200 Chinese cities since its first center in the country opened in 2003, according to the company’s website.

The abrupt closures of non-academic training centers come just a year after authorities targeted the academic training sector. The “double reduction” policy sent shockwaves in the country’s burgeoning tutoring industry, fueling anxiety among parents and students, shutting major educational powerhouses, and leading to massive job cuts.

The non-academic training sector, valued at over 600 billion yuan, is now witnessing uncertainties, as authorities ramp up their monitoring of pricing and operations and hint of a regulatory mechanism. Data collected from 10 cities — including Beijing, Shanghai, and Shenzhen — in May showed that pricing for such classes such as music, dance, and arts had slightly increased from April to a maximum of 300 yuan per hour.

In April this year, Gymboree centers in Jinan and Zaozhuang in the eastern Shandong province were also shut down without warning or refunding clients.

Sixth Tone’s call to the Gymboree center in Shiyan on Thursday went unanswered. Its headquarters in Shanghai said they could help register families’ complaints but their issues would be handled by local franchises.

In recent weeks, several other non-academic training centers have also shut down. The My Gym pre-kindergarten training center in the northeastern city of Dalian closed in May without notifying or refunding parents, though the company has promised to pay back any money that was due.

“They didn’t just hurt my purse, they also hurt the feelings of my children,” said a mother who has been sharing her experiences online. “My kids loved the place. I don’t know other ways to protect my rights apart from venting my anger on social media.”

The mother claimed she lost 18,000 yuan due to the sudden closure.

In addition to the pre-kindergarten services, a famous music education company, Little Musician, has also been navigating rough weather. The company reportedly hasn’t paid its teachers for months.

In mid-June, Little Musician’s founder wrote an open letter to parents and teachers, acknowledging the company’s capital flow issues and operational challenges. Founded in 2015, the company connects 300,000 private music tutors with 4 million students for both online and in-person classes.

A parent in Shanghai told Sixth Tone her child had more than 30,000 yuan worth of classes left with Little Musician.

“It’s not the first time I lost money from a tutoring center suddenly going out of business,” she said. “Last year, it was an English tutoring center. I don’t know what I should trust now.”