Dov Charney
Dov Charney - 
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TESS VIGELAND: You've heard of American Apparel: the clothing company that uses provocative photographs of half-naked women and men in its advertising. Well this week provocativeness gives way to salaciousness. The company's CEO Dov Charney has a court date to defend himself against accusations of sexual harassment by a former employee.

Ashley Milne-Tyte reports on what effect the lawsuit might have on the brand that's known for manufacturing its clothing in the U.S. and paying health insurance for its employees

ASHLEY MILNE-TYTE: This is the fourth time Dov Charney has been accused of sexual harassment, but the first time a case has made it to court. His accuser says, among the things we can repeat on air, that he used degrading language towards women, and wore only his underwear in several meetings with her. But retail consultant Patti Pao says just look at the company's ads. Any potential employee must realize political correctness doesn't apply at American Apparel.

PATTI PAO: When you go work at a company you have to fit with their culture. The culture doesn't fit with you. I'm not excusing it by any stretch of the imagination, because I think it's actually kind of hideous, but that is part of the culture of the company.

Pao says the clothing will continue to sell well regardless of the lawsuit because the brand is hip, but Robert Pasikoff of Brand Keys isn't so sure. He says American Apparel's core customers are in their teens and early 20s. They may not even know about the case yet.

ROBERT PASIKOFF: Nothing travels faster than the speed of light, except bad news on the Internet, and these days it depends on how the social networking groups view this kind of an event.

But retail consultant Howard Davidowitz says if anything hits profits, it won't be the outcome of a sexual harassment case.

HOWARD DAVIDOWITZ: As long as the company is doing well I think Charney is golden. I think the risks to the company are they are in a very weak sector. Teen apparel is getting murdered almost across the board.

He says if Charney had to tone down his risque marketing campaign, now that would hurt sales.

In New York, I'm Ashley Milne-Tyte for Marketplace.