Translation:The emperor paid for the expensive clothing.
Yes, we still use the word but rarely for the clothes themselves.
"Det klæder dig"= it looks good on you, "it" being anything from a dress or suit to a new hairstyle.
"De klæder dig"= is the same only for plural things like shoes or jevelry.
"Jeg klæder mig på" = i am getting dressed.
Nowadays it is usually a verb rather than a noun.