。
She was wearing a red skirt.
Literal
She [topic-は] red skirt [object-を] was-wearing.
はいていた uses はく, the verb for wearing items on the lower body — pants, skirts, shoes, socks. This is a key distinction in the Japanese 'wear' verb system: 着る (upper body), はく (lower body and feet), かぶる (head), する (accessories), かける (glasses). Skirts use はく because they go on the lower body, even though in English they might feel more like a 'wearing' item.