There are a few decent fabric shops in Frankfurt. Besides Karstadt already mentioned, there's also the following places in the city centre:
Stoffe & Deko Lagerverkauf, Brönnerstraße 11, right opposite the entrance to the Karstadt car park
Very reasonable prices. The place is like a big bargain bin and you can get some really great deals.
Attia Stoffe, Hasengasse 1, right next to Kleinmarkthalle
Gorgeous fabrics but quite expensive
, next-door to the Oxfam bookshop
Stock mostly lining fabric but are a great place for haberdashery and sewing notions. They also carry Vogue, Simplicity and Butterick patterns and will order if not in stock. Service isn't all that friendly, their staff must be the moodiest bunch I've ever encountered in Frankfurt.
Fantastic selection of sewing notions, very reasonable prices and first-class service
In Frankfurt-Sachsenhausen, there's Martino Stoffe
Reasonable-sized selection, very friendly and helpful staff
The majority of designs available here is a tad boring for my taste, so I now buy fabric mostly over the internet. I regularly use and am very happy with