This has gone on for centuries and still does (cash for clothes). People collecting old clothes and repaired them and reselling them. The period I have in mind was the early 1800’s in the East End of London. It was mainly the Jewish community which did this.
The secondhand clothes were known as slops, the people who collected the clothes employed tailors and seamstresses to do the repairs and make garments clothes in the quiet times (or at least, this is what I would do). The mills producing more fabric than ever, the cost of the fabric must have been falling in price. It would not be far-fetched to suggest that the demand for clothes began to out strip supply of the collection secondhand clothes, the population in the Urban centres were increasing at fur nominal rate with new employment in the factories. It would not be unreasonable to think we had the right environment for a new industry. The Slop dealers had a small work force and also sold fabric from their warehouses. The factories workers although not well off did have some money to buy clothes from fabric warehouses and maybe not the time to make them. This was an opportunity was not to missed. Slop dealers started making “ready to wear” clothes.
This new industry must have got out of hand very quickly if the demand was very increasing. As we would say today, they would have looked for “out-workers” or “outsourced” the work. At the time this was called sweating, it started with out-workers working at home and then small house or tenements were rented for the workers in to assemble the garments (see accompanying picture). This work was mainly done by women. This work practice created the term sweatshops. There was no need to bring the work force together as the work was still done by hand, only steam-powered machines would require a building to house it.
It seems to me, it would not be too long before salesman would be employed to sell clothes and get orders. Advert printed to advertise the clothes and where you could buy them. It is still true today, that if you have a workforce they will need to be kept feed with work to pay their wages.
This is not a single company making clothes, but hundreds. They are not going to make all the same garments, but different ones. You would get specialist say in coats, jackets, trousers or shirts.
From here it is only a short hop and a jump to shops selling a wide range of clothes either from one maker or many. I am in debt to TonySeymour.com for the information about Elias Moses department store(1832). The site point out that this department store was the forerunner of the like of Harrods(1834) and Selfridge(1904) here in Britain also the idea was carried across the Atlantic both the sweatshop and the department store of Macy’s (1858) in New York.
Just to end with, we still of the firms that started in this way in the middle of the 1800’s. Mark & Spencer(1884) and Moses Brothers (Moss Bros 1851) they still deal in second clothes but they repair them and rent them out again.
In this section I am very grateful to this website for filling in all the details for me.http://www.tonyseymour.com/people/elias-moses
Also an old school I found on my bookshelf.
Men and machines by CF Strong published 1970 by Oxford university press.