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GEMS find the UK market isn’t a gold mine
publication date: Jan 31, 2007
author/source: Richard Taylor
Sunny Varkey’s plan to build his Dubai-based company Global Education Management Systems (GEMS) into one of the leading chains of UK independent schools was ambitious and attracted many critics. GEMS’ UK foray has undoubtedly been less successful than Varkey hoped and the company has recently sold one of the schools, Kingswood College in Lancashire, because the Grade 1 listed building was simply too expensive to run profitably.
This is a tough but pragmatic decision and underlines the competitiveness of the value section of the independent schools market. It also follows criticism from Varkey in The Financial Times, that the difficulties with obtaining planning permission were an impediment for GEMS and other independent school operators. However, Cognita, chaired by Chris Woodhead and Alpha Plus, backed by Sovereign Capital, are both far more bullish about the prospects for the local market. According to Ryan Robson, Senior Partner at Sovereign, ‘planning issues can be a problem for schools in both the government and independent sectors. For Alpha Plus, far more important are the quality of the school, its ethos and management’.