Those attempting to ignore fashion might say "function over form", yet the form of clothes have quite a bit of function: social affiliation, likeability, attractiveness, and other important aspects of dealing with humans are directly affected by fashion. My recent research on the topic suggests that it's a highly specialized field, requiring a great deal of continuing research and effort to understand in depth.

The issues of concern are:

Fit. How well does the item conform to your body shape? This is critically important and yet very difficult to assess in a quantifiable or repeatable way, and is therefore the area where an expert would make the most difference. Of note, tailoring an existing item can be very cheap, as little as $5 to $15 for shirt alterations (of course there are many that charge more), with much to learn from the tailor's advice.
Quality / Cost. The fabric used, the location and process of manufacture, the conformity to accepted standards, and the dollar cost. Most purchases by the fashion conscious are done using sales, and the "retail price" is the sucker price. ("Nobody pays retail.") Bespoke (custom, or personally made for you) items are generally at the top, though also high cost.
Currency. A "modern" fit, meaning conformity to current style decisions regarding lengths, widths, color matching, and type matching. (Note that there are several mentions of conforming, and none of comfort.) Individual items are often referred to as S/S 11 (Spring/Summer 2011) or F/W 10 (Fall/Winter 2010), indicating a two season per year refresh rate on the exact meaning of "modern". This is the primary reason it requires continuing research; avoiding this and remaining stylish requires use of "classics".
Details. Once the basics are covered, the details make a big difference. The lining, the hint of different colors, patterns vs. solids, vents, hems, etc. This is often the accepted place to show individuality.
Patina. Items straight out of a box are good for being generally impressive and showing a pristine appearance, but often the 'life' of an item comes through after many uses, shown as scuffs, fades, wrinkles, even stains or rips, telling a story about that item and its owner. Patina is why ripped jeans can be stylish.

There are many very specific rules which fall outside of this, such as which colors, patterns, or styles to wear for which occasions ('business casual', 'law firm', 'weekend', 'prom', 'street'). They're too many to easily enumerate, culturally specific, and I haven't yet found a place which tries to lay out "consolidated wisdom".

Stores are ranked by their ability to produce the cheapest clothing with the highest rating - good fits out of the box using quality materials at sale prices. Many fashion followers have "grail" items, things which are out of their price range, but they wish to acquire. They also tend to have extensive collections for mixing and matching: closets full of shoes or 8 sweaters that are barely different, showing signs of potential hoarding and materialism. It's easy for many such people to spend thousands of dollars on a single item, such as a pair of boots or a handbag.

Fashion is dangerous territory for anyone with a desire to min / max; it's subject to threshold effects, constant change, and diversification requirements. There's normally a large gap between 'basic quality' items you can buy at mall stores and 'good quality' items from luxury stores. For example, there's many basic quality leather or canvas handbags in the $40 to $150 range, but to go up a tier, you'd have to hit $1000 or more; pretty much everything in the $150 to $1000 range is of $40 to $150 quality. Bargain hunting, used by true fashion followers to acquire such items, requires significant time and effort. Which names are worth the money also changes over time, with some switching from top quality to using flimsy leather, third-world workers and mechanical stitching, or YKK instead of RiRi zippers, without letting anyone know, requiring individual inspection.

To get back on the topic of signalling, clothes rank third behind grooming and body type when discussing personal appearance. Getting a nice haircut, being cleanly, smelling good, exercising, and controlling your diet make more difference, and cost much less in dollar terms, though they take much more time. This fits with a signalling theory that primary signals are related to difficult-to-fake costs: how much time you've put in to look the way you do, with dollars (purchased items) being a proxy, easier to fake, allowing patina to add value.

With clothing, the rules are more often broken or ignored, especially for many areas outside of large population centers - people simply dress like those around them, with what their parents style them as, or with what they have access to in the immediate area. It's often stated on the fashion forums I've lurked for months now: "98 percent of people don't care about this stuff and won't notice the difference."

Conforming to the basics seems like a much easier goal.