Hi Edel,
Here's a list of cheap and moderate priced chains for hip clothing (there are more, but these are the ones I like):
Zara, Mango or MNG, Blanco(super trendy!), H&M, Promod, Amichi, Don Algodon(poshish), Stradivarius, Topshop, Springfield, Women's Secret(for lingerie and more), Cortefiel(a lot more formal),….
Then there are some more nice places, but their prices are "less attractive", so go there during 'rebajas' time; that would be from January 1st. until mid February, and from July 1st. until mid August:
Massimo Dutti(awesome), Cedosce, Tintoretto, Miss Sixty, Benetton, Caramelo, Globe(super-expensive if you ask me!)....
For reasonably priced shoes I love Fosco basically. Also Pilar Burgos, Geltra, Camper and El Caballo, but these last two are expensive. And when you feel like something more exclusive, there are several places to buy sort of "sample" shoes, at (supposedly) cost price. Many of the chains/shops listed above sell shoes as well.
A good option is to head towards Goya Street, there is a Mango, Massimo Dutti, Promod, H&M, Cortefiel, Blanco, Geltra and a Fosco shop only a few metres away, a nearby Zara in Principe de Vergara Street and one Stradivarius store is right across the street. I just did that little tour on Friday.
Other very commercial areas in this way are Princesa street, and Preciados street, this one close to the Puerta del Sol.
AND, there are “outlet shopping places” but outside of the city; such as Las Rozas Village, and Factory.