Dov Charney, who faced down nine sexual harassment lawsuits in his time as head of American Apparel, has been sensationally fired by the fashion retailer's board of directors.

Charney, who launched the company as a wholesale t-shirt business in 1989, had spent years fighting multiple allegations of sexual harassment from female employees. All cases have now been dismissed or settled.

A company spokesperson confirmed that the 45-year-old entrepreneur has now been ousted as chairman and CEO, effective after a 30-day grace period.

"We take no joy in this, but the board felt it was the right thing to do. Dov Charney created American Apparel, but the company has grown much larger than any one individual and we are confident that its greatest days are still ahead," a statement read.

In the early noughties American Apparel, known for its racy slogan, bright clothes and ethical stance, was a sensation on the high street.

But despite Charney's rise to fame as the man behind one of the one world's biggest brands, his success has been tarnished with rumours of illicit liaisons at work. The string of allegations includes asking employees to masturbate in front of him and receiving oral sex from an employee during an interview.

In 2004, Charney admitted that he was a "bit of a dirty guy" but insisted he only ever had "consensual" sexual relationship with employees.

"I am a bit of a dirty guy, but people like that right now," he said at the time.

By March 2012, the tide turned in his favour when a judge tossed out a $260million suit filed by Irene Morales, who accused Charney of "extreme psychological abuse and torment" .

The 21-year-old, who started working as a shop assistant aged 17 in 2007, also claimed he threatened to fire her if she didn't perform sex acts on him.

Charney's dismissal could be American Apparel's bid to clean up its reputation.

Until the company appoint a new CEO, chief financial officer, John Luttrell is expected to replace Charney temporarily.