Advantage Life Sees Ames Bankruptcy Hurting Sales

Advantage Life Products, a Laguna Hills distributor of anti-smoking products, said Friday that the Chapter 11 bankruptcy filing of one of its biggest clients has at least temporarily snuffed out a large chunk of its sales.

Ames Department Stores, which filed for bankruptcy protection from creditors last month, owes Advantage about $360,000. The New England-based retail chain accounted for more than 15% of Advantage’s total revenue during the past year.

“The timing of Ames’ announcement a week before our fiscal year-end is unfortunate, and the long-term impact on Advantage sales will depend on their reorganization plan,” the company said in a statement.

Ames had planned on buying between $250,000 and $300,000 worth of the company’s CigArrest product, a chewing gum sold as an alternative to smoking.

Advantage has been hoping that a recently imposed smoking ban on almost all U.S. airline flights would result in improved sales for CigArrest.

Advantage President Charles Sleichter said he expects Ames to place new orders for CigArrest once its reorganization begins.

Advantage said the Ames bankruptcy will not adversely affect the company in the short run because it has almost $1 million in cash and no debt.

“We can certainly take that hit and carry it for a long time,” Sleichter said.

For the first nine months of its fiscal year, Advantage had net income of $925,000 on sales of $8.3 million. Sleichter said fourth-quarter earnings will be down 3 to 4 cents a share from earlier projections of 26 cents a share.