How do I add a sub category to my store
Manage my store>categories>add sub category (under the main category or beside it, according to how you have it set up).
Manage My Store, then Store Categories, then choose the category you want, then add
or that is how mine is set up.
Live and Love as if there is no tomorrow.
Note that a store category can contain listings or it can contain sub categories, but not both.