At level 1 your Heroes can only use armor and weapons. Boots slot is unlocked at level 20, gloves slot is unlocked at level 80.
To get a more powerful equipment you need three items of the same type but of lower level. Enter the Forge to see available pieces of equipment. If you have enough items to spare, you will see a red marker on corresponding gear. Select the amount of new gear you wish to get and tap the "Forge" button.
Removing equipment from a Hero will cost you some gold coins.