Sixties Icon: As Carnaby Street celebrates 50 years, the extraordinary story of how a shy, young man from Govan began it all

'THEY SEEK him here, they seek him there, in Regent Street and Leicester Square. Everywhere the Carnabetian Army marches on, each one a dedicated follower of fashion," sang The Kinks in 1966. One week in polka dots, the next in stripes, this "flower to be looked at flitted from shop to shop just like a butterfly," Ray Davies continued.

• The British pop band 'The Troggs', Reg Presley, (right) Chris Britton, Peter Staples and Ronnie Bond wearing Stephen's suits

All those shops would have been in Carnaby Street – once a scruffy, unsavoury thoroughfare which became the centre of Swinging London in the 1960s – and the suited and booted "general" leading the Carnabetian Army was an astute, creative, entrepreneurial Scot, John Stephen.

Stephen, a fine-featured, coolly handsome Glaswegian – who never lost his accent despite the odd Cockney intonation – was the fashion equivalent of a rock star. Indeed, those stars, with the Mods and the Rockers, besieged the 15 shops he owned in the iconic street, which has marked its 50th anniversary this year with fashion shows and an exhibition centred on Stephen, who was commemorated with a blue plaque in the street, in 2005, one year after his death.

The plaque – surely the only one in London dedicated to a gay Glaswegian who persuaded men into purple velvet trousers – is at 1 Carnaby Street, close to the site of His Clothes, which he opened in 1957.

Like so many other Scottish fashion designers – from Jean Muir and Bill Gibb to Christopher Kane today – Stephen's influence was worldwide. Thanks to him, from the late 1950s to the early 1970s, the cry of the peacock was heard across the globe, for he exported his "Carnaby" boutiques to Europe – Italy, Sweden, Norway, West Germany, even the island of Ischia – as well as to the United States.

He was variously known as "The Modfather" and "The King of Carnaby Street," and Stephen's life and achievements are celebrated in three new books: the gorgeously illustrated Boutique London; a biography, inevitably entitled The King of Carnaby Street; and Carnaby Street: 1960-2010, cataloguing the history of the street.

All three books recall a heady era when Mary Quant, Biba and Vidal Sassoon were household names, whether you lived in Paisley or Paris. Yet, as Richard Lester, the distinguished fashion historian and author of Boutique London, points out, relatively few people nowadays know of John Stephen. Quant once remarked of him: "He made Carnaby Street. He was Carnaby Street. He invented a look for young men which was wildly exuberant, dashing and fun."

The Rolling Stones, The Beatles and The Who all bought into the look that Stephen introduced: the first shrink-to-fit Levi's imported from the US; sexy, low-slung hipsters; bell-bottoms; double-breasted velvet jackets; zany floral shirts and natty crochet ties – all in eye-popping colours. Indeed, Lester has tracked down a wonderful photograph, taken in 1964, of a baby-faced Mick Jagger and a frighteningly innocent-looking Keith Richards shopping in Carnaby Street.

They're both clutching John Stephen carrier bags. Jagger stares into his with a look that says he can't wait to get into his "fab gear", as the parlance of the day had it.

"You can't underestimate the importance of Stephen's contribution to international fashion," says Lester. "His influence is still felt in the fashion world today." He believes that Stephen determined early on to keep a low personal profile, despite the flamboyance of his designs and the fact that he cut "a handsome and dashing figure", because to be homosexual 50 years ago was illegal.

So who was John Stephen?

The sixth of nine children of an unemployed engineer, he was born in Govan into a proudly working-class family, growing up in a Glasgow tenement. His father could not find work during the Depression, so his shopkeeper in-laws set him and his wife up in a grocer's shop, giving Stephen his first taste of retail.

Never an A-student, Stephen – who was to become a multimillionaire with a silver Rolls-Royce by the time he was in his early twenties – left school at 15, becoming an apprentice welder in the shipyards, where he was desperately unhappy in that bruising macho culture. His sister, Rae Black, of Loch Fyne, Argyll, recalled in 2005 that he couldn't bear putting on a boiler suit or getting dirty, because he was always beautifully dressed.

He soon left the yards and got a job in a men's outfitters in Glasgow. But Scotland back then was no place for an exquisitely dressed aesthete with homosexual leanings. So, in 1952, when he was 18, Stephen moved to London and got a job in the military uniform department at Moss Bros in Covent Garden, which offered him an invaluable insight into the art of tailoring.

At a party, he met Bill Franks, who became his devoted lover and who eventually managed the John Stephen empire's finances. Franks recalled in 2005: "He was a shy, gentle person, yet very charismatic, very interested in other people, brimming with ideas."

Stephen left Moss Bros and got a job as a sales assistant at Vince's Man's Shop, the first male boutique to open in the Carnaby Street area. It was run by Bill Green, a photographer known as Vince, who specialised in homoerotic portraits of the masculine physique. One of the earliest ads for his Newburgh Street shop featured a strapping Sean Connery in matelot vest and skintight jeans – another of Lester's archval discoveries for Boutique London. Vince sold clothes to "Chelsea homosexuals, artists and theatrical muscle boys," gossiped the actor John Gielgud.

Fashion lecturers Judith Clark and Amy de la Haye explain: "Vince started out as an edgy, subcultural clothier: his style inspired the Carnaby Street peacock revolution." That revolution was spearheaded by Stephen, though, who opened his first shop in nearby Beak Street, with savings of 300. Shortly afterwards, he moved to a larger shop at 5 Carnaby Street, where he was nothing if not inventive. One evening he took a mohair blanket and fashioned it into a sweater for Cliff Richard – for an eye-watering 3 – to wear on TV.

John Stephen clothes were heavily influenced by the camp, bohemian underground world of Soho, so they were body-conscious, emphasising the toned male physique. Early designs were run up on a sewing machine in the back of the shop, but within a few years he'd colonised the entire street and soon had his own large-scale manufacturing business, with factories in Glasgow.

When Stephen discovered that girls were wearing his menswear designs, he opened the trendy Trecamp Boutique, in which the changing rooms were decorated with life-size images of male bodybuilders – "so that they can feel men's eyes on them," he said. Sophia Loren, Elizabeth Taylor and Marlene Dietrich, as well as Dusty Springfield and Sandie Shaw, were all seduced by his designs.

"Perhaps his most significant legacy to retailing, however, is the way in which he understood that celebrity approval was the key to beginning and shaping trends he could meet," says Lester. "The creation of the John Stephen Fashion Award for the Best Dressed Man in 1964 meant that huge crowds and pages of publicity were guaranteed every year." In 1968, Stephen even opened a Carnaby Street Scottish Highland Shop, with a Scotch and Soda Bar, where customers could enjoy a wee dram while being fitted for a mini-kilt. Sensing a sea-change in the market for throwaway youth fashions, Stephen went public with his company in 1972 by which time Carnaby Street had become a tourist trap anyway. He started franchising and brought the chic Lanvin For Men label to London. In 1975, he sold the rights to his name, reinventing his business persona as Francisco-M, opening more shops, including one in New Bond Street, selling exclusive, elegant menswear.

Despite his glittering success, Stephen's personal life was troubled. In his late thirties, he developed drink problems, finally joining Alcoholics Anonymous and remaining a member for the rest of his life. He was diagnosed with cancer in his neck when he was 34. He recovered, dying from the disease at the age of 69, only three years after he'd retired from the rag trade, which had made him rich enough to afford the rock-star lifestyle, with a string of Rolls-Royces, homes in Cannes and Marbella, and his own table at The Ivy, where he always dined in the company of his beloved Alsatian, Prince.

Throughout his career he preserved an archive of his press and photographic records. These were presented to the Victoria & Albert Museum, which has devoted several retrospectives to him.

Dedicated followers of fashion the world over owe the glamorous Glaswegian an enormous sartorial debt, even if, as Richard Lester remarks: "Menswear has become bland and boring today." The Kinks still remember Stephen making – to their specifications – "itchy Thames-green suits, with leather straps," for their gig on the popular TV show Ready, Steady, Go! Ironically, he'd never have worn such foppish frills and furbelows. Stephen was a three-piece-suit-crisp-white-shirt-dark-tie-guy. Bill Franks, for instance, remembered them going to a finance meeting in the early 60s with Lloyds Bank executives.

"They'd dressed for the occasion – bright pink shirts with big collars, floral ties. They looked like the people who ran Carnaby Street. We were in dark suits and white shirts. John and I just smiled; I suppose that's when we knew we were doing quite well."

• Boutique London, A History: King's Road to Carnaby Street, by Richard Lester (ACC Editions, 24); The King of Carnaby Street: The Life of John Stephen, by Jeremy Reed (Haus, 16.99); and Carnaby Street: 1960-2010, by Judith Clark and Amy de la Haye (London College of Fashion, University of the Arts, 20).