L'Oreal struggled to transform The Body Shop and sold it to Natura.

The Body Shop has been sold to the parent company of Aesop for $1.6 billion.

French cosmetics giant L'Oreal sold The Body Shop to Brazilian make-up company Natura Cosmeticos for €1 billion (NZ$1.6b) on Wednesday.

Natura's bid was far higher than analysts expected it to go for.

SUPPLIED RCG retail expert John Polkinghorne said: "All retail businesses need to innovate and refresh themselves constantly - The Body Shop is no exception."

The Body Shop opened in New Zealand in 1989. There are 28 stores in New Zealand under OLT Retail owned by Kiwi franchiser Barrie Thomas.

﻿READ MORE: Body Shop gives itself a makeover to repair battered margins

﻿"I've owned the stores here for 35 years had to embrace many changes and quite honestly we're looking forward to the future. Nutura will be a really good fit," Thomas said.

SUPPLIED The Body Shop New Zealand owner Barrie Thomas says Natura is value-led company with a great reputation.

"Retail generally is struggling. We've got some stores performing really well and some more challenged. It's been tough year."

﻿The Body Shop Queensgate opened a new refitted store two weeks ago and other stores would be transformed as shop leases were renewed.

"Change is expensive but we do it as often as we can," Thomas said.

L'Oreal, which owned brands such as Garnier, Maybelline, Lancome, and Giorgio Armani, bought the brand for £652m (NZ$1.2b) in 2006.

Chief executive Jean-Paul Agon pledged to improve the chain's performance in 2016, and said sales growth would accelerate.

But after The Body Shop recorded a drop in sales for the 2016 year, L'Oreal decided to sell.

Natura would be the fourth company to try and transform the brand.

RCG retail expert John Polkinghorne said: "The Body Shop has been a real success story in New Zealand. They've had a long history here and consumers are aware of their strong ethical stance."

"That should position them well for the future, since business ethics are a bigger issue today than they've ever been.

"But all retail businesses need to innovate and refresh themselves constantly, The Body Shop is no exception. They need to make sure that they stay relevant and have the best offerings instore and online."

The Body Shop sells 1000 products in 3000 franchised stores in 66 countries.