My advice is to cull some and keep some (only your favorites + really handy but unexciting things like singlets, bibs, onesies). I kept a lot of DD1's clothes without really sorting thru and when the time came to use them, we only used some - the ones I liked the most - because let's face it - shopping for baby clothes is fun!

For storage, I would recommend using stackable lidded crates, with bags of dried lavender or cedar balls to keep the critters away.