Shabby
mid 17th century: from dialect shab ‘scab’ (from a Germanic base meaning ‘itch’) + -y1.
wiktionary
From shab(“scab”) + -y, or directly from an alteration of scabby. Cognate with Scots shabby(“in poor health, ill”), Dutch schabbig(“poor, needy, shabby”), Middle Low German schabbich(“miserable”), German schäbig(“shabby”), Swedish skabbig(“scabby”), Swedish sjabbig(“shabby, mangy, scruffy”).
etymonline
shabby (adj.)
1660s, of persons, "poorly dressed," with -y (2) + shab "a low fellow" (1630s), literally "scab" (now only dialectal in the literal sense, in reference to a disease of sheep), from Old English sceabb (the native form of the Scandinavian word that yielded Modern English scab; also see sh-). Similar formation in Middle Dutch schabbich, German schäbig "shabby."
Of clothes, furniture, etc., "of mean appearance, no longer new or fresh" from 1680s; meaning "inferior in quality" is from 1805. Figurative sense "contemptibly mean" is from 1670s. Related: Shabbily; shabbiness. Shabby-genteel "run-down but trying to keep up appearances, retaining in present shabbiness traces of former gentility," first recorded 1754. Related: Shabaroon "disreputable person," c. 1700.