North American wearing 26 fine muslin (8)
I believe the answer is:
nainsook
'muslin' is the definition.
(nainsook is a kind of muslin)
'north american wearing 26 fine' is the wordplay.
'north american' becomes 'na'.
'wearing' becomes 'in' (wear in (and 'in' is fashionable)).
'o6 fine' becomes 'sook' (I am not sure about this - if you are sure you should believe this answer much more).
'na'+'in'+'sook'='NAINSOOK'
Can you help me to learn more?
(Other definitions for nainsook that I've seen before include "Material" , "Fine soft cotton fabric" , "Corner location houses first class new section on cotton fabric" .)