It does mean הלבשה or wrapped.
To my best knowledge it means that the item (made of plastic, wood, metal in most cases) had a solid backbone, and the upholstery was just attached to the surface. For example a plastic seat with onsert upholstered back. The back is plastic for support, but some padding was inserted for comfort. In Hebrew, again to my best knowledge, you can just say מרופד.