I've used UnderArmor type of clothe in the past. I'ts light weight, folds well, doesn't wrinkle and very pliable. I think it would hang well for a cape too. You can also make a small hole in it to place over a neck or thumb for rentention.
It's not that hard, really. Get a piece of cloth, make it the shape and size you want, put the wire maybe a quarter inch away from the ends of the cape, fold on top of the wire and glue with some kind of fabric glue.
hope this helps.
dakota