n. To artificially boost sales at the end of a fiscal year by offering distributors and dealers special incentives to purchase more goods than they need.
In April investors filed a class-action suit, claiming Dunlap had deliberately misled them and that "channel stuffing" had caused sales to collapse in the first quarter.
Andrew C. Brosseau, an analyst with Cowen & Company, has gone from a strong buy on Informix in December to "underperform" today. "Fundamentally, you still have the lingering impact of the channel stuffing that took place in 1996," he said, noting that the company now faces a restructuring and potential layoffs.
He also believes vendors are finding that distributors are carrying much more clout, especially with the merger of Ingram and Micro D, and won't put up with channel stuffing by software publishers.