(A) other housewares catalogs with magazinelike formats do not already exist ->
This assumption is out of scope.
(B) an upscale clientele would be interested in a housewares catalog ->
Looks interesting, lets see if anything else is as interesting.
(C) the same copywriter and graphic artist could be employed for both the clothing and housewares catalogs ->
Well, again out of scope, the type of artists employed has nothing to do with the gist of the argument.
(D) a magazinelike format requires a copywriter and a graphic artist ->
This statement is talking more about the magazine formatting rather than the use of the format to woo audiences.
(E) customers to whom the old clothing catalog appealed would continue to make purchases from catalogs with the new format ->
This also can be analyzed. But then the statement ends with houseware catalog. And probably the stem is related to that instead of old clothing buyers..
B looks more convincing.
The NEGATION test on B - IF the company invests, say a million $$$ in creating this fancy catalog, but fails to take into account its consumers'preferences, then it is wasting its resources. From the premise, it appears that the company is trying to make an appeal to upscale clientele. Clearly those folks need to be on the same page for the company's policy to be fruitful....