The board said late Wednesday that it has suspended Charney and plans to terminate him for cause.

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(USA Today) Shares of American Apparel soared 14% in morning trading Thursday after the retailer's board of directors voted to fire CEO and founder Dov Charney.

The board said late Wednesday that it has suspended Charney and plans to terminate him for cause.

In a statement, Board member Allan Mayer said the "decision to replace Mr. Charney grew out of an ongoing investigation into alleged misconduct."

Charney, 45, has been the subject of several lawsuits alleging inappropriate sexual conduct with female employees. He has acknowledged having sexual relationships with workers, but said they were consensual.

The board named the retailer's chief financial officer John Luttrell as interim CEO effective immediately. David Danziger and Mayer were appointed as co-chairmen of the board.

"We take no joy in this, but the Board felt it was the right thing to do," Mayer said in a statement released by the company. "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."

Charney could not immediately be reached for comment. Born in Montreal, Charney started American Apparel while a student at Tufts University. He moved the company to Los Angeles in 1997.

In an interview with Marketplace at the start of the year, Charney told host Kai Ryssdal that his biggest weakness is himself, saying "I'm my own worst enemy."

He also acknowledged his knack for pushing boundaries, such as with his company's controversial billboards and advertisements that often portray very sexual images.

The company has 249 retail stores in 20 countries and has about 10,000 employees. The brand markets itself as sweatshop free and produces all of its clothes in the U.S.

The company said the management changes may trigger a default under its credit agreements and that it will talk with its lenders for a waiver.

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