If you were mrs. price, how would you have handled the situation

I would feel angry because no one will take the ugly sweater

First of all i would ask the class if anybody was missing a  sweater if nobody said yes i would say there is no shame in forgetting that you left a coat in the coatroom.
Instead of saying it was ugly i would go out of my way to say what a nice sweater it was and why somebody might need it. what the teacher doesn't realize is that by saying something is bad looking that she might be embarrassing the student therefore he does not want to be seen calming that the sweater is his