I know they still sold fabric up until at least 1974. Remember those cute smock tops way back then? I bought most of my fabric at Penneys for them. There was McCrory's 5 & 10 cents store that sold fabric too. I don't remember any store that sold strictly fabric.
About 15 years ago I started 1 of my first quilts, it is all scrappy and it has fabric from all those tops in it. It has never been quilted, I just recovered it from the bottom of a fabric bin a few weeks ago I plan on quilting ASAP. It has so many memories in it.