For each of the past two years, major department stores have

Question

For each of the past two years, major department stores have reported a nearly 50% increase in their sales of men's clothing manufactured by Zachary, Inc., a result that is all the more surprising because the sales of most other brands of men's clothing have been depressed over the same period. Nevertheless, even Zachary, Inc. does not appear to have emerged unscathed from the overall trend: despite the aforementioned increase, Zachary, Inc. has reported a slight decline in overall sales in each of the past two years.

Which of the following, if true, most helps to explain the surprising result above?
 
(A) The sales of clothing at Zachary, Inc.'s boutique stores, which, unlike department stores, are owned and operated by the company itself, have held steady over the last two years.
 
(B) Two years ago, Zachary, Inc. began an ambitious new advertising campaign; in each of the last two years, the company's advertising department has overspent its planned budget by almost half.
 
(C) Zachary, Inc. is renowned for the quality of its fabrics, and sells large quantities of fabric to other manufacturers of men's clothing.
 
(D) Zachary, Inc. formerly manufactured leather accessories and women's clothing in addition to men's clothing, but, for the past three years, the company has produced only men's clothing.
 
(E) In the last two years, the percentage of Zachary, Inc.'s clothing sold by department stores at discounted prices has been unusually high, a result that analysts have blamed on the sluggish economy.

pqhai · Accepted Answer

GENERAL METHOD:

For Resolve the Paradox questions, we must select an answer that can explain both sides of the situation, not only one side. That's the KEY.
Before solving this question, please note that there are two types of answers ALWAYS are incorrect:
1. Explain only one side of the paradox.
2. Just explain the similarities and differences, e.g. if the stimulus contains a paradox where two items are similar, then an answer choice explains a difference between the two cannot be correct.

APPLY:

The logic here is: men clothing manufactured by Zachary increased 50%, but overall sales of Zachary slightly decreased. You see the gap?   OVERALL Sales do not mean ONLY men clothing  . If you see an answer that shows Zachary men clothing sales increased, but sales of Zachary's products OTHER THAN men clothing decreased. That would be the answer. Because   OVERALL SALES = MEN CLOTHING + OTHER PRODUCTS  . Only men clothing sales increased is not enough to conclude Overall sales increased.

CONSIDER EACH ANSWERS:

A) The sales of clothing at Zachary, Inc.'s boutique stores, which, unlike department stores, are owned and operated by the company itself, have held steady over the last two years.  - WRONG - Out of scope 
 
B) Two years ago, Zachary, Inc. began an ambitious new advertising campaign; in each of the last two years, the company's advertising department has overspent its planned budget by almost half.  - WRONG - Out of scope 
 
C) Zachary, Inc. is renowned for the quality of its fabrics, and sells large quantities of fabric to other manufacturers of men's clothing.  - CORRECT - Because Zachary's fabric is famous, so many people want to buy men clothing manufactured by the company --> Men clothing sales increased. Besides men clothing, Zachary also sells fabrics to other manufactures. However, other manufactures sales decreased because of weak economy (mentioned in the stimulus), making Zachary's overall sales slightly decreased.  Because they are also Zachary's customers . This is the answer! 
 
D) Zachary, Inc. formerly manufactured leather accessories and women's clothing in addition to men's clothing, but, for the past three years, the company has produced only men's clothing.  - WRONG - Out of scope. 
 
E) In the last two years, the percentage of Zachary, Inc.'s clothing sold by department stores at discounted prices has been unusually high, a result that analysts have blamed on the sluggish economy.  - WRONG - Please review my note above, the answer that explains only one side is ALWAYS incorrect. E only explains why men clothing sales of Zachary increased, but doesn't explain why Zachary's overall sales decreased. That cannot be the answer.

I hope it helps a little bit.

Skywalker18 · Answer

Zachary Inc revenues have increased by 50 % in past 2 years whereas most other brands have had depressed sales during the same period .
ZAC , which is the parent of Zachary Inc . , has reported a slight decline in overall sales in past 2 years
Paradox – the other subsidiaries of ZAC did not do as well .

A)The sales of clothing at Zachary, Inc.'s boutique stores, which, unlike department stores, are owned and operated by the company itself, have held steady over the last two years. Does not explain 
B) Two years ago, Zachary, Inc. began an ambitious new advertising campaign; in each of the last two years, the company's advertising department has overspent its planned budget by almost half. Advertising campaign might decrease profits but won't impact the revenues
C) Z.A.C. is renowned for the quality of its fabrics, and sells large quantities of fabric to a variety of manufacturers of men's clothing. Correct - Z.A.C is a supplier of fabrics to other clothing brands . We know that most of the clothing brands have had depressed sales during last 2 years . Because of slowdown in demand , these brands purchased lesser amount fabric from ZAC . Hence , the total revenue of ZAC declined .
D) Zachary, Inc. formerly manufactured leather accessories and women's clothing in addition to men's clothing, but, for the past three years, the company has produced only men's clothing. Does not explain the paradox as we already know that Zachary Inc sales have increased YoY for last 2 years . This might make more sense if it talked about the parent company .
E) In the last two years, the percentage of Zachary, Inc.'s clothing sold by department stores at discounted prices has been unusually high, a result that analysts have blamed on the sluggish economy. Incorrect - Does not address the paradox as we are only concerned about total sales/revenues.
Answer C

BillyZ · Answer

Official Explanation 
(1) Identify the Question
 
The language explain the apparent contradiction indicates that this is an Explain the Discrepancy question.
 
(2) Deconstruct the Passage
 
According to the passage, sales of Zachary Inc. men’s clothing at department stores are up significantly over the last two years. Nevertheless, despite that increase, overall sales numbers have shrunk over the same period. The passage also mentions that other brands of men's clothing have experienced a decline in sales as well.
 
(3) State the Goal
 
The apparent contradiction is the decrease in Zachary's overall sales despite the jump in the sales of men's clothing at department stores. Since the department-store sales of Zachary’s men’s clothing have definitely increased, the only possible explanation for this result would be a decrease in some other aspect of the company's sales.
 
(4) Work from Wrong to Right
 
(A) According to this statement, the boutique stores' sales remained constant. To help explain the unexpected drop in the overall sales, the boutique stores' sales would need to have decreased over the two-year period.
 
(B) The current passage is focused only on sales, not on the overall profitability of the company, so advertising expenses are irrelevant.
 
(C) CORRECT. The other men's clothing manufacturers did experience a decline in sales. If those companies did not buy as much fabric from Zachary's as they had in prior years, then Zachary's overall sales could have declined even as their own clothing line continued to sell well.
 
(D) A decline in sales for other product lines could be relevant, as long as those declines occurred within the past two years, since the passage is concerned only with Zachary's sales trends over the past two years. Changes that occurred three or more years earlier are irrelevant.
 
(E) Participation in two new business ventures that have not proved to be profitable as of yet does not explain Zachary's decrease in sales. The company has to have lost sales somewhere. New business ventures that aren't performing well yet are perhaps not adding many new sales, but that does not impact prior sales from existing divisions. (Further, note that this choice says only that the new ventures are not very profitable yet—a new venture could have a lot of sales even though it is not yet able to turn a profit.)

CJWORK · Answer

Is "Zachary, Inc. is renowned for the quality of its fabrics" enough to prove that the company's revenue for men clothes increased?

warrior1991 · Answer

GMATNinja   carcass   VeritasKarishma   GMATNinjaTwo

I am not convinced by reasoning given for Option D. Please explain as to how option D is wrong.
Also can we expect such questions on the D-Day??
I got this question in MGMAT exam and was stumped after seeing D as the answer. I marked C as an answer.

DmitryFarberMPrep · Answer

warrior1991  Yes, this is a standard GMAT question type. As for D, the problem is that the stimulus specifically refers to a drop in sales in the last two years. Since the company has sold only men's clothes for three years, a change that happened three years ago can't explain the drop we're looking at.

gzsakuraz  We don't need to  prove  that Z's sales of men's clothes are up, since that is established in the argument. We're trying to explain why the company's overall sales are down despite the big jump in sales of the clothes they make. If they also sell fabric to the competition, that could be where the loss is, since the industry is not doing well.

marawargayatri · Answer

For those who answered D:
The logic that there could have been a decline in sales of other products is right. But the catch here is the timeline.
The women's clothing has been shut down 3 yrs ago, and the estimates in the stimulus is given for 2 yrs ago. 
If it has produced only men's clothing for past 3 yrs, then it can not possibly suggest the decline as sales of men's clothing increased.
Whereas in option C, it says that the product other than men's clothing was still sold to other manufacturers, which in turn could have caused the decline in sales and thereby causing the overall decline in sales of Zacher.

rmahe11 · Answer

This is not a good question as per GMAT. I feel D also solves the paradox

DmitryFarberMPrep · Answer

rmahe11

Please review the thread above. D can't explain the paradox. GMAT CR is all about precision, and we need to know that the explanation in the correct answer choice can account for the *exact* discrepancy in question, even if it doesn't do so fully.

VerbalBot · Answer

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For each of the past two years, major department stores have

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For each of the past two years, major department stores have

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