Gaudy, incorporating new decoration (7)
I believe the answer is:
garnish
'decoration' is the definition.
(garnish is a kind of decoration)
'gaudy incorporating new' is the wordplay.
'gaudy' becomes 'garish' ('garish' can be a synonym of 'gaudy').
'incorporating' means one lot of letters goes inside another.
'new' becomes 'n'.
'garish' going around 'n' is 'GARNISH'.
(Other definitions for garnish that I've seen before include "Sharing (anag) - dress" , "Decorate with herbs" , "Decorate food for table" , "Dress - trimmings" , "Embellish food" .)