First you want to clear out everything from the closet so it is totally bare. (Also good time to vacuum the floor while it is empty!) Each item you take out should go in one of the following piles:
Keep It fits, makes you look great, serves a purpose as you go places where it is suited, and you love it! If it needs repair, buttons replaced, hemming etc, set it aside to get it to the alterations lady! Put those in your car so you know to drop them off when you are next in that area.
Donate It no longer fits or doesn't flatter you, maybe it is too young for you now or you no longer attend the kind of affairs it is suited for--donate it so it can bring someone else joy and give you more closet space. If you think you might someday wear it, but haven't in the last year, let it go.
Ditch Worn bare clothes that are of no use to anyone can be trashed, or ripped up to use as rags.
Decide how you want your closet organized before beginning to replace the items you are keeping. I like all my tops together, short sleeve to long with order of color. I do the same for my slacks, etc. Do what works best for YOU!
Allow some time for this chore. You'll be rewarded with extra closet space at the end and an organized clothing, shoe and handbag supply. Plus, your donations are going to help others! And, making life easier to find what you want adds calm to your life. Get rid of the clutter--you deserve the calm.