There is a newish fabric shop opened in Hornsby - Designer Factory Fabrics. It has a slew of interesting fabrics - nothing at all like the run-of-the-mill Spotlight ones. Apparently the rolls are what is leftover from designer use, so the collection is somewhat idiosyncratic. There are dress and furnishing fabrics. I find it is always better to go there with a project in mind, rather than for a particular fabric in particular colour, if you know what I mean.
It is on the corner of Pacific Highway and Government Road, but underneath the liquor shop; takes about 3 mins to walk from Westfield or the station.
The prices are generally cheaper for better quality than I usually find in Spotlight, for example.
There is also Tina's Fabrics - in Westfield. There are many rolls of fabric all squashed in - a good range of fabrics and designs, lots more conventional ranges than Designer Factory Fabrics, but worth a visit too.