Cleaning giant Reflections Group collapses into receivership

Melbourne-based cleaning, security and facilities management company Reflections Group has been placed in receivership, and will now be put on the sale block.

The company, which was founded in 1980 by Wayne Crewes, provides services to 450 cleaning sites and around 70 security sties. It is said to clean about a third of all shopping centres around Australia, and claims to clean four million square metres of floor space, 300,000 car spaces and over 50,000 food court chairs every day.

The group has annual turnover of $150 million, and says on its website it employs 3500 people out of offices in Melbourne, Brisbane, Sydney and Adelaide.

The business was placed in the control of receivers Mark Korda and Andrew Malarkey from insolvency firm KordaMentha yesterday.

The pair says they will start advertising tomorrow for expressions of interest to recapitalise or acquire the business.

Korda said in a statement the business would be offered for sale as a going concern and all proposals for an equity injection would be considered.

“Meanwhile, the operations would continue on a business as usual basis subject to the group’s clients continuing to support the business.”

Employs have been told they will continue to be paid while working for the group.

Those within the cleaning sector say rumours of problems at Reflections Group had been circulating for some time, and have warned the collapse will have huge ripple effects for participants at all levels due to Reflections’ size.

Gerry Goldberg, acting president of the National Cleaning Suppliers Association, says it is still not clear how big the debts left by the company will be – industry scuttlebutt suggests somewhere between $5 million and $9 million – but says a number of his members are in serious trouble.

“There are lots of stories and rumours floating around, but the only thing we know is that ultimately there are quite a number of resellers who have sold to Reflections and are now not likely to get their money back,” he told SmartCompany.

“We know some of them are in very deep. They will go broke for sure.”

What particularly worries Goldberg is the ripple effect – if the distributors who sold toilet paper and other products to Reflections can’t get paid, their cashflow will not allow them to pay their suppliers and manufactures.

“I doesn’t matter whether that supplier’s products was being to Reflections – everybody will suffer.”

Goldberg say the industry will be waiting to see how long the receivers will allow Reflections to continue to trade, or whether the shopping centres seek to bring in new cleaning contractors.

“We knew there was a problem and we knew the bank had gone in there, but the rumour was the bank was going to… keep the business operating. The shopping centres still need to be cleaned.”