Towel wrapped around chick (5)
I believe the answer is:
owlet
'chick' is the definition.
(a young owl)
'towel wrapped around' is the wordplay.
'wrapped around' indicates anagramming the letters.
'towel' is an anagram of 'OWLET'.
(Other definitions for owlet that I've seen before include "Young bird of the night" , "Nestling" , "Young nocturnal bird of prey" , "Young fly-by-night" , "Baby bird of prey" .)