Sentimental - those old t-shirts, etc. that remind you of good times, but you'll likely never actually wear. Oust or move these to the same spot you store other sentimental items.
Specialty & Costume - Type - These could be sports jerseys you only wear for the big games or clothes & accessories you'd only dig into for a themed / costume event. Keep in its own area so that you can easily find when the time comes without cluttering your daily wardrobe.
Damaged - Whether stained, torn, or missing a button, you're not getting closer to "fixing" it when located here in your closet. Make a separate to-do bin for these items, or come to terms with reality and let. it. go.
Your closet and daily routine will thank you!!