Craze of French new in fashion (7)
I believe the answer is:
derange
'craze' is the definition.
(I know that craze is the is a more specific form of the action of derange.)
'of french new in fashion' is the wordplay.
'of french' becomes 'de' ('of' in French).
'new' becomes 'n' (common abbreviation eg NT for New Testament).
'in' means one lot of letters goes inside another.
'fashion' becomes 'rage' (something all the rage is fashionable).
'n' going within 'rage' is 'range'.
'de'+'range'='DERANGE'
(Other definitions for derange that I've seen before include "Throw into disorder" , "Unhinge" , "Craze" , "Remove from order" , "Put into confusion" .)