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(CNN Business) —  

Struggling retailer L Brands reported lousy earnings last week because its Victoria’s Secret chain continues to lose customers. One investor has had enough.

James Mitarotonda, CEO of activist hedge fund Barington Capital, urged L Brands to make some big changes Tuesday. Barington Capital owns a small stake in L Brands.

In a letter to L Brands (LB) CEO Leslie Wexner, Mitarotonda suggested spinning off Victoria’s Secret, which faces challenges from bra upstarts ThirdLove, Lively and American Eagle Outfitters (AEO)-owned Aerie. Mitarotonda also thinks its a good idea to launch an initial public offering for the far more successful Bath & Body Works chain.

L Brands needs to “take swift action to improve the performance of Victoria’s Secret, by, among other things, correcting past merchandising mistakes and ensuring that Victoria’s Secret is communicating a compelling, up-to-date brand image that resonates with today’s consumers,” Mitarotonda said in the letter.

He added that despite the merchandising problems, Victoria’s Secret and its sister brand PINK are still market leaders that can be fixed.

But Mitarotonda said the company “must evolve to meet their customers’ changing demands or risk suffering declining profits and a loss of market share.”

Mitarotonda’s biggest criticism was Victoria’s Secret’s marketing, which has often relied on supermodels strutting around in skimpy lingerie.

He said the “brand image is starting to appear to many as being outdated and even a bit ‘tone deaf’ by failing to be aligned with women’s evolving attitudes towards beauty, diversity and inclusion.”

Shares of L Brands rose as much as 3% on the news. But the stock lost more than half its value in 2018, making it one of the worst performers in the S&P 500. L Brands shares have fallen for the past three years.

L Brands said in a statement that it “welcomes open communications with our shareholders and values input that may advance our goal of enhancing shareholder value.”

The company added that it has already taken some steps to improve its performance, including the closure of the Henri Bendel brand, sale of its La Senza business, new product launches at Victoria’s Secret and PINK and the slashing of its dividend.