The most common and most likely answer to this crossword clue is the 7 letter word BLOUSON
I've seen this crossword clue in Financial Times
B
L
O
U
S
O
N
Buddy explains!

The straight part
We know that "loose-fitting jacket" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case loose-fitting jacket = blouson.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does BLOUSON mean?
BLOUSON noun- A garment drawn tight at the waist with blousing hanging over the waistband