Clothing and fashion is composed of silhouette, design details, and material. Ethiopia is one of the countries which have a unique material for clothing known as Shämma. Even though, Shämma were used for a long period of time for clothing for everyday activity throughout the society, currently it is not practiced more than that of holidays and some religious activities. Currently the traditional fabric Shämma, became substituted by different kinds of product from abroad while there is a great demand of it in local market. Therefore, this research is prepared to characterize the properties of Shämma and to develop a new handmade woven fabric to make a Men‟s and women‟s collection for casual as well as formal wear. The research has been done through different qualitative and quantitative research approach. The quantitative approach helps to study and analysis of the fabric properties of Shämma through selected fabric parameters and the qualitative approach is used to identify the usage of Shämma in the contemporary market and to understand the consumer‟s behavior. Therefore, the finding of this research indicates that Currently the traditional fabric Shämma is used for different kinds of end uses but it is not used for different uses like that of formal as well as casual wears. The experiment result shows the difference between the previous and the New Shämma fabric. The experiment result shows that, the new handmade Fabric obtains a good improvement of Physical parameters. Finally based on the research finding different men‟s and women‟s collection has been made by the new handmade Shämma fabric for different casual and formal wears.