In a hip loft, in the hippest borough of the hippest city in America, a hundred or so energetic young people wearing vintage dresses, modded Nikes, and skinny jeans turn to face a makeshift stage. This is Greenpoint, Brooklyn, where a selection of creative types have congregated on a Friday night in January to enjoy free beer and celebrate the opening of the neighborhood's newest clothing store, Ruffeo Hearts Lil Snotty.

As its outré name would suggest, the store aims for a stratospheric level of cool. There are spandex body suits with wild color blocking, quadruple-extra-large hoodies, and a line of men's underwear called "manties"—all handmade in Brooklyn, partly with recycled materials. The announcer quiets the crowd with a barrage of obscenities before introducing the founders, Sarah Jones and Mackswell Sherman.

Sherman emerges, beer in hand, wearing a baseball hat cocked sideways, a sport coat, and a pair of silver superhero tights. Jones, clad in an orange cardigan and a studded green shirt, looks almost square by comparison. They grab a pair of shears and snap a ribbon. Balloons drop from the ceiling, the band gets going, and models show off the new line while sipping on cans of Bud. Yes, the models are drinking, too.

Four years ago, Jones and Sherman were Dumpster-diving college students at Evergreen State, a bastion of hippie higher learning in Olympia, Washington. They foraged for fabrics outside clothing factories and hawked T-shirts on the streets of Seattle. Today, they are comers on New York's indie fashion scene. Their clothing has appeared in several fashion magazines and blogs, on the person of the pop star Kelis, and on CBS Sunday Morning. Jones and Sherman are still small scale—most months they have just a few hundred dollars left after paying their business expenses and their rent—but their work is in a growing collection of independent boutiques, and they no longer have to sew in their bedrooms. "We're hungry but happy," says She...