If people are offended by the VS aspect of it, maybe you could decorate it more as a clothing store in general? Although the "Go red, purple... greek" would be enough for me to assume it's VS. Honestly, as someone in that demographic, the Pink brand is very innocent and fun. Nothing see through like the more adult brand so I don't think it's inappopriate at all.
As for decorations, polka dots would be cute. A stuffed dog if you have the funds. It would be cute if you could even put little wall hangs on a wall and hang sorority shirts with the letters on them, sort of like clothing is displayed. You could sorta copy their sayings, they have "Love Pink" and all that so you could do "Love Greek/Sisterhood/Philanthropy" banners.
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