@Rosemary
Both. The City of Elseways is about 10-15% multilimbed people, but there are lots of other reasons people would need clothes altered to suit themselves. There are so many different shapes, though, that just offering clothes off the rack in every single one of them would be pretty wasteful, so instead there are lots and lots of tailors. Anywhere clothes are sold, you'll find someone nearby ready to re-stitch them into any size you need.
@Rosemary
Yeah, that's about how it works.