TBI Head Office: We Couldn’t Pay the Rent!

In recent days we have had confirmation of the shocking reports that not only has TBI Sudirman gone out of business, but TBI (The British Institute) has been forced to abandon its own Head Office on Level Four of the Sequis Centre.

They used to be so proud of that office, right in the financial district of Jakarta and not far from the Indonesian Stock Exchange. This high-profile premises symbolized their delusions of grandeur to a tee. They were a ‘premium’ company which was “one of the leading language providers in Indonesia and South-East Asia”. They used to make managers repeat this mantra over and over at meetings.

The long-term goal of the company was to have 30 schools by 2015 and now they are down from 4 to 3 schools in Jakarta, having been forced to close their prestigious Jalan Sudirman school because of severe money problems. Far from expanding, they have now lost a group school and even had to re-locate their Head Office.

This latest debacle eclipses anything that has happened before. It is a complete and total vindication of our recent series of four articles in which we argued that the company was now having severe money problems and the real problem was the rent-seeking nature of the enterprise, which meant that a few well-connected insiders were creaming off all the profits and not investing in growth or the future. Now, after all these years, the crows have finally come home to roost in a big way and they have been forced out of their Head Office.

Now, these professional liars will be spinning this huge failure madly, telling people that it is actually good for the business, that the savings will make the business more efficient and lean and all the rest of the crap they can think of. However, none of this was in their long-term plans and it is the exact opposite of what they dreamed of.

And the real question is does closing a school actually improve a badly mismanaged and inefficient company? In its heyday, the company had revenue of up to 300 million  ($30,000 a month). Now, we have heard that student numbers have slumped at almost all their branches and only two are still profitable. But how does losing a stream of revenue improve a business? How is it going to make TBI any more competitive in the tough Jakarta market? All it really means is they have such severe cash flow problems that they simply couldn’t afford to keep it open. This business’s problems just went from chronic to acute.



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