Nested Tags or Categories for clothing products

[YangTegap]

I have a store in which I'm using the Dawn theme. This will be a clothing store. I want to integrate a side-bar with nested categories similar to many of the large online clothing marketplaces. For instance, I'd have something like this:

Mens >

    Shirts >

        Sweaters >

        T-Shirts >

        Button-Ups >

I've been scratching my head looking at plugins, categories, and tags. How can I implement something like this?

[YangTegap]

Thank you!