Stretchy material — it's interwoven with lace (7)
I believe the answer is:
elastic
'stretchy' is the definition.
(something elastic can be stretched)
I can't explain the remainder of the clue.
Can you help me to learn more?
(Other definitions for elastic that I've seen before include "Kind of band" , "Material for bands" , "Pliable" , "Narrow band of rubber" , "capable of adapting to change?" .)