If answer is C, I feel there should be a that before It was closing up to one fouth of its stores because of poor sales.
Here 'that' is used as a connector so it can be omitted. What I mean by connector can be clarified by the following examples:
I have a radio that does not function properly.
I have a radio (that) I want to sell.
In the first sentence, 'that' is the subject of the relative pronoun clause so it cannot be omitted. In the second sentence, 'that' is not the subject of the subordinate clause (the subject is 'I' ) so it functions more as a connector and can be omitted.
This is something I picked up on the forum from one of the experts. I believe it was e-gmat
. I will post the link to the article when I find it.
Hope this helps.