My daughter is attending Cal Poly SLO in Sept so we went up during her spring break to check out the area and take a tour of the campus. In San Luis Obispo there was a shop called Betty's Fabrics. I didn't have a chance to check it out but it looked quite large from the outside. If you are driving around SLO you can't miss it.
We are going back up again in August so I will hopefully have a chance to check it out and report back. :)