I did this little project the past weekend with my daughter. We had a piece of scrap wood sitting around. We painted it together, picked out the hooks together and my daughter even helped me drill the holes for the hooks! (Lots of help...drilling is quite hard for a 2 year old)
I was sick of having my daughter's tutu's sitting around...they didn't quite fit in with all the stuff in the toy box, but we don't have other dress up things otherwise. Down the line, we might replace this with a dress up closet, but for now it does the trick.
If you're wondering, I did the owl art (available here) and the growth chart. Both are a mixed medium..paint and scrapbook paper.
Helping me paint the board...also her pants..and face...and arms.