This is the first suit of armor available in the game. It is sold at the shop in Tonoe and can be equipped only by Alys. Until you find this, Alys is without armor. Chaz is also without armor, but Tonoe does not carry any for him.
Yeah, it doesn't look like much, especially compared to some of the armor that comes up later. I was glad to get it, though. Alys really takes a beating up to that point.