Upvote:4
After some digging into this question, I realise that @LangLangC's comments are right.
Looking at the dictionary, one of the lexical meanings of the adjective utility is:
utility
[…]
2: Functional rather than attractive.
Correspondingly, the term utility clothing had (and actually still is, but I'm limiting myself here to pre-WW2) referred to functional clothes, serving primarily for utility rather than beauty.
While in some contexts utility clothing refer to everyday clothes, which may actually be stylish (though not "dressy"), in some other contexts this term just referred to work clothes, which of course are not supposed to be attractive.
It is understandable, then, why those women interviewed back in 1942 – in the lack of firsthand experience with Utility Scheme clothes – had the impression that such clothes will look bad.
Let's demonstrate with examples these two related meanings, i.e., utility clothing (1) as a juxtaposition to dressy clothing, and (2) as simply meaning work clothes.
Note: unfortunately, all examples are from American sources, not British ones.
(1) utility as a juxtaposition to dressy
The Mother's Magazine, Volume 12 (source. published in New York, 1844):
Textile-apparel Analysis - Volume 4 (source. published in New York, 1928):
Where and how to Sell Manuscripts (source. published in Massachusetts, 1919):
Now take a look at this advertis*m*nt by Lane Bryant for maternity clothing, from 1917 (source, from Vogue, volume 49, number 4, February 1917) – this utility coat looks quite nice, isn't it?:
(2) utility clothes are just work clothes