One of the great ironies of the fashion world is that it can be a very unsexy place to work. Fashion professionals tend to be more interested in the length of your skirt than what’s underneath it. There are two simple reasons for this: the women are too petrified of spoiling their hairdos to engage in anything too sweaty, and the men are mostly gay.

But once in a blue moon, a man struts into this odourless world so sluiced with testosterone, it makes your eyes smart — men such as the modelling agent John Casablancas, who founded Elite and claimed he never “knowingly” bedded a girl on his books younger than 16. We can now add a new legend: Dov Charney, founder and CEO of the outré high-street retailer American Apparel.

By all accounts, Charney — who, at 39, bears more than a passing resemblance to a bearded 1970s porn baron — is a very naughty boy. He is currently facing his fifth lawsuit in three years for sexual harassment of an employee. He’s won two so far.

His latest accuser is Jeneleen Floyd, who worked in the product-placement department at AA’s headquarters in Los Angeles. She claims that, one afternoon, he stormed into her office in a blind fury and demanded she pretend to masturbate for him. She demurred, so another (male) colleague obliged and, for good measure, Charney joined in, too.

If true, this is quite vanilla by Charney’s standards. At his office and factory, the geekily handsome Canadian is known to attend business meetings in his underwear — once, memorably, in a thong — and regularly refers to female employees as “sluts” and “whores”. (“Some of us love sluts,” he said by way of defence in a recent deposition.)

More jaw-droppingly, in the course of an interview with a female reporter from an American women’s fashion magazine, Charney wiggled in his desk chair, loosened his Pierre Cardin belt and inquired, “Can I?” Without pausing for an answer, he hoiked his trousers down and proceeded to, well, you know, all the while chatting away about AA’s business forecast for the coming year. The reporter dished in her piece, claiming Charney had pleasured himself in front of her “eight or so times” and that she also witnessed him request oral sex from an employee, who obliged.

You can’t help but wonder, is the man sex mad? Or suffering from undiagnosed Tourette’s? His reported misdemeanours — none of which have actually come before a jury — don’t stop in his pants. Earlier this year, he got in very hot water with his shareholders after he called his chief financial officer a “complete loser” in an interview with The Wall Street Journal (the CFO quit shortly afterwards). He is also being sued by Woody Allen for $10m for using an archive image of the film director to sell his clothes. Meanwhile, his faintly paedo ad campaigns — mostly starring topless teenage girls in gym socks and hot pants — evoke the ire of feminists and right-wing religious zealots alike. Stuart Rose he is not.

And yet, for all he is doing wrong, Charney is clearly doing something very right. He puts this down to his “Yiddish hustle”. Born in Montreal in 1969, he spent his youth bulk-buying American T-shirts — he loved the quality — and selling them on to his classmates back in Canada. He set up his first retail operation in South Carolina in 1989. After that went bankrupt, he moved to California and, in 1998, while still in his twenties, started American Apparel.

Surprisingly for a man with such a cavalier attitude to sex in the workplace, he has been practically canonised for his saintly employment practices. Every last neon T-shirt and retro swimsuit is manufactured in his Los Angeles factory, where the staff are paid twice the minimum wage and enjoy untold benefits, including full family medical insurance and shares in the company.

The ethical approach works — right-on shoppers think it a charming antidote to the sweatshop sleaze that has plagued companies such as Gap and Nike — and since the first store opened in 2003, American Apparel has opened nearly 200 more (nine in the UK) and is now turning over close to $500m a year. It is the unequalled darling of thrifty nu-ravers, fashion sages and MySpace kids. Interestingly, the label has also become a staple of more clued-in yummy mummies. There are branches in Notting Hill and even one in po-faced Kensington, all staffed by smacked-out-looking ingénues with asymmetric hair. Well-heeled women, and their husbands, can’t get enough.

“I can’t count the ways why I love American Apparel,” confirms Rachel Johnson, a very yummy mummy indeed. “They do everything: slobwear, sportswear, swimwear, partywear — and their lamé leggings have a cult following. I pop into the Portobello Road branch almost daily, and the whole place is totally vibing. It’s the Studio 54 of casualwear.”

Mary Portas, television’s tough-talking retail guru, explains the brand’s appeal. “Well, it’s nothing new. In fact, Charney is using one of the oldest marketing ploys there is,” she sniffs. “If you make something seem sexy and edgy, it makes the people who buy it feel sexy and edgy, too. There are plenty of people over 35 who want to feel like that.”

These days, Charney lives on an LA hilltop in a mansion stuffed with his “extensive” collection of vintage porn magazines. It’s the setting for some of the saucy ad campaigns he shoots himself. He never uses professional models, preferring to snap “hot” women he knows or girls off the street. In the past, instead of fit models, he has used local lap dancers. “At a strip bar, you get a cross section of chicks,” he once told The New Yorker. “You’ve got big chicks, little chicks, big-assed chicks, little-assed chicks, chicks with big tits and chicks with little tits. You couldn’t ask for a better place to fit a shirt.”

Could the sex scandals ruin him? “No way,” says Portas. “It all fits in with the brand. I think he’s actually very clever. You don’t get your d*** out in an interview and not know what you’re doing.”

And isn’t it much worse to have your T-shirt stitched by a child slave from Indonesia than a responsibly paid young woman who has to endure the occasional ignominy of her boss running round her workspace with his meat and two veg hanging out? Certainly, the man himself is as enthusiastic about his success as only he could be. “I could be watching a porno, and, boom, there is my T-shirt. I’ve made millions!” he once exclaimed with glee. Never mind his next collection, we all want to know what Dov Juan will do next. Once he’s dispatched those pesky lawsuits, of course.

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