The most common and most likely answer to this crossword clue is the 3 plus 2 plus 5 letter word OUT AT ELBOW
I've seen this crossword clue in The Times
O
U
T
A
T
E
L
B
O
W
Buddy explains!
The straight part
We know that "looking shabby" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case looking shabby = out at elbow.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.