Hmm. You should take a look at skinned cloth, it's much more optimized than interactive cloth since it's oriented for characters. You'd have to skin that cloth with bones though. Actually in this specific case it might be better to leave it as it is but for stuff that moves along with the character like a cape or a skirt I…
OK did a quick texture mock up just photo sourcing random textures for the cloth at the moment but will do the real texture tomorrow any tips for clothing and/or skin textures?? O.o