Beat Story Mode, Time Attack Mode or any mission in Challenge Mode to unlock new costumes for the character you've beaten those modes with.

You can either beat Time Attack in Challenge Mode, Story Mode , or 10 Easy Mission in Challenge Mode for 1 hidden character in follow order:

1- Kim Kaphwan
2- Richard Meyer
3- Fio (Fiolina Germi)
4- Hanzo Hattori
5- Bonne Jenet
6- Nightmare Geese
7- Lilly Kane
8- Ninon Beart
9- Wilf Wolf
10-Kyo Kusanagi Classic
11-2nd Mr. Karate
12-Armor Ralf
13-Hyena
14-Jivatma