Asian investors see profit in NZ beauty schools

A student from the Elite International School of Beauty Therapy gives a massage demonstration. Photo / Michael Cunningham

A group of Australian-based Asian investors is buying up New Zealand schools offering services such as design, beauty therapy and hairdressing - and eyeing foreign students and the local ethnic market in their attempt to double the profits.

Last week, the Sydney-based investment group took over the Elite International School of Beauty and Spa Therapies chain of schools in Auckland, Hamilton and Wellington to add to their portfolio, which includes the School of Design and Arts in Christchurch.

Director Victor Lim said other purchases it was negotiating include a film and television school, an early childhood education chain and one hair academy.

He said the group had access to $40 million of "ready investment" money through Arowana Capital, but he would not say how much had already been invested into its New Zealand education buy-up.

The Overseas Investment Office, which is responsible for administering New Zealand's overseas investment legislation, said a consent might be required for the group to invest in the country's education sector.

But he could not could not confirm yesterday as the office did not have full details of the investment transactions.

Mr Lim said many private schools here, apart from those offering English or mainstream education, either ignored the ethnic student market or put it into the "too hard basket".

He believed reaching this market "could double the earnings".

"They present a tremendous potential for growth, and it's a market we want to seriously capitalise on," he said.

On Auckland's North Shore, nearly 20 per cent of residents identified as being Asian in the last Census, but the ethnic make-up of students at Elite's Mairangi Bay campus was 95 per cent Pakeha, he said.

Only five of 80 students there were international, full-fee-paying students.

"Beauty learning is big business in the Asian community, so why are they not here? Little has been done to reach this market even though many live just right next door to us," Mr Lim said.

Sociologist Paul Spoonley said foreign ownership could "internationalise" New Zealand trades and professional training and qualifications.

"I think New Zealand does its trades training quite well and obviously it's meeting local demand, but having foreign owners could make a local product or trade international in a much more obvious way," he said.

But he cautioned that legislation was needed to ensure standards are kept, so these schools do not go down the path of some language schools and private training establishments which had substandard education programmes because of a lack of control on the export education industry early on.

Elite's former owner Simon Harding said he did not target international students or the ethnic market because he "didn't have the resources or scale to do so".

"I have taken the school as far as I could, and I think the new investors will have the financial muscle to take it now to a different level."