I would tell her full out she needs to make changes or she isn't going to advance. If she is as smart as you believe she is then (as you know) the higher up women move in position the less emotional you can afford to be regarding review of you or your work. It takes some "thick skin" to go toe-to-toe at the top of the ladder. If she can't handle being told in a direct way she needs to up her game on the clothes deal - she's isn't going to do well moving up anyway.
I've had that conversation with lot's of younger ladies on the way up and usually they were a little embarrassed that someone had to tell them. I've had quite a few come back later on and thank me for helping them out, and that is worth the awkwardness of the discussion to get them headed in the right direction.
I usually addressed it as understanding the difference between a personal style preference and an expected business "uniform". Dress for success and all that.
Because of the position I was in I wore heels and a suit to work almost every day of my life and that is as far from being my personal style as you can get.