The first version of the song was written by Costello in 1974 and featured post-war themed lyrics that were largely scrapped in the final recording.
[1] This early draft was entitled "From Kansas to Berlin" and was "a big, grand song about postwar life" according to Costello.
"[2] According to Costello, "the carnal comedy in ['New Lace Sleeves'], all the embarrassment of the morning after" was not present in the original draft of the song.
[1] As he explained in his autobiography Unfaithful Music & Disappearing Ink, "If the tone of the first draft had been a little pious and even moralistic, I wasn't feeling nearly so high-minded by 1980".
[4][5] The song notably features a drum pattern by Pete Thomas that was inspired by Devo's cover of "(I Can't Get No) Satisfaction" and Stevie Wonder's "Superstition".
[6] Bassist Bruce Thomas said, "I don’t think I’ve ever used a pick except for effect – such as on the song "New Lace Sleeves".
Rob Sheffield of Rolling Stone noted the song as well as "Watch Your Step" as "the album's undisputed twin highlights", while the Rolling Stone Album Guide described "New Lace Sleeves" as a "great song" where Costello "finally comes clean about his woman problems".
[5][8] Stephen Thomas Erlewine of AllMusic called the track a "highlight" of Trust and Blender praised Costello's "peerless acid tongue" on the song.