Yet the former contains baby clothes (7)
I believe the answer is:
layette
'baby clothes' is the definition.
(I've seen this before)
'yet the former contains' is the wordplay.
'the former' becomes 'late'.
'contains' means one lot of letters goes inside another.
'yet' put into 'late' is 'LAYETTE'.
(Other definitions for layette that I've seen before include "baby's things" , "Complete set of baby clothes" , "Clothes and accessories for newborn child" , "baby needs this" , "First clothes" .)