You need either a 'repair hammer' or tongs to repair equipment (from random loot, or check the enchantress in the marketplace, SE of the fountain, or IIRC the legion quartermaster upstairs in the legion cookhouse, etc).
After that you can double click the repair hammer, right click and use it (or drag it to the skillbar to use with a left click) and then click on the equipment to be repaired. Alternately, for a character that knows that ability, you can right click on equipment they are wearing with less than full durability and select 'Blacksmithing'.
