Time may be running out for Victoria’s Secret

It’s no secret that fewer people are buying bras, panties and other intimate apparel at Victoria’s Secret. The company’s sales have been sliding for a while, and one Wall Street analyst thinks time may be running out for the retailer’s parent company, L Brands, to fix it.

Citigroup analyst Paul Lejuez downgraded shares of L Brands Monday from a “buy” to a “neutral” rating and slashed his price target from $35 a share to $27, citing concerns that management is “slow to implement meaningful change” with “cultural norms shifting away” from the company.

Victoria’s Secret has struggled to adapt as consumers in the #MeToo era have shunned the company’s advertising including models posing in lingerie. Its reliance on push-up bras has also alienated customers that prefer rivals’ custom-fitted bras.

Women are shopping more at rivals such as ThirdLove, Lively and American Eagle Outfitters-owned Aerie instead of Victoria’s Secret. Those companies are pitching inclusiveness and comfort over sex appeal.

With that in mind, Lejuez said it is time that Victoria’s Secret “adopted a more inclusive approach.”

But he’s worried that anything L Brands does to turn around Victoria’s Secret “may be too little too late.” He added that the company could come off as inauthentic if it finally makes a meaningful change to its marketing strategy and products.

“It will be a tough balancing act to attract new customers without alienating its existing customer base. While we still think a change toward inclusivity is the right move, a move in that direction might be more difficult to pull off,” Lejuez wrote.

Lejuez isn’t the only one worried that L Brands has lost its way. James Mitarotonda, CEO of activist hedge fund and L Brands investor Barington Capital, urged the company earlier this year to make some big changes.

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