。
She was wearing a luxurious silk dress.
Literal
She [topic-は] luxurious silk 's clothes [object-を] was-wearing.
豪華な ('luxurious, gorgeous, lavish') is a na-adjective for opulence on display — fitting for jewelry, banquets, palaces, costumes. 絹 (きぬ) is silk, written with a pictographic-style kanji depicting threads. Japan has its own deep silk-weaving tradition, with regional specialties like 西陣織 (Nishijin-ori, the silk brocade of Kyoto) and 結城紬 (Yuki tsumugi, a Tochigi/Ibaraki tsumugi silk). の binds 絹 to 服 as 'silk clothes / silken garment.'