Asda once copied Walmart’s strategy so well that Walmart swooped in and bought the company. But just as Walmart eventually pulled out of the business, Asda has been on a downward spiral of late.

In fact, little seems to have gone right following the controversial and highly leveraged takeover of the British supermarket chain Asda by the Issa brothers, based in Blackburn, north-west England – better known for their petrol station and gas station empire – and by the private equity firm TDR Capital.

The Issas (Zuber and Mohsin) have since faced persistent questions after they, like TDR Capital, invested just $131 million in cash in the deal, with the rest financed by the largest sterling corporate bond sale ever and a loan from the parent company EG Group, according to Bloomberg.

Asda is currently searching for a new chief executive after the supermarket has endured several difficult years since the retailer’s debt-fuelled $8.9 billion takeover. The GMB (Union for the Ease of Doing Business) union called on the owners to take “urgent action” and warned of signs the supermarket was “in a fight for survival”.

Recent results do little to disprove that view. Asda, in which Walmart has a 10% stake, reported that sales fell 6.4% in the three months to August 10, making the supermarket chain the only one of the so-called “big four” in the UK to report a drop in sales, along with Tesco, Sainsbury’s and Morrisons.

This meant that Britain’s third-largest supermarket chain lost 1.3 percentage points of market share to 11.8%. It is now just ahead of German discounter Aldi in fourth place and is looking increasingly unlikely to be able to hold on to this position for long, as Morrisons did before it.

Change of ownership at Asda

Zuber Issa is selling back its 22.5 percent stake to TDR, while Mohsin will retain his stake but is expected to exit day-to-day operations when the deal closes in the fall. As a result, TDR will increase its stake from 45% to 67.5%, while Mohsin will retain 22.5% and Walmart will retain its 10 percent stake.

Asda and EG Group also feel increasingly intertwined. After acquiring Asda with TDR, the brothers integrated part of their EG Group petrol station business into the grocery chain last October when Asda bought part of EG Group’s UK business for around $2.6 billion, giving it 356 locations including convenience stores at petrol stations. The deal was financed by another $1 billion in loans as well as $588 million in new funding from the Issas and TDR. In June this year, EG Group sold its remaining UK petrol stations to Zuber for almost $300 million.

Mohsin was even asked to resign by Asda chairman and retail veteran Lord Stuart Rose after the former Marks & Spencer boss said he was “ashamed” of the chain’s performance, which had hit its lowest market share in at least 13 years.

Nadine Houghton, national representative of the GMB union, which represents thousands of Asda workers, accused TDR Capital of financial mismanagement, saying the company had “piled debt on this British institution and now the rot is creeping in”.

Asda responded that the loss of market share came as part of a “comprehensive period of transformation”, which included opening neighbourhood stores and upgrading IT infrastructure, as well as an additional store investment programme worth $39 million in the second half of the year.

The company has also completed the refinancing of the majority of its $5.1 billion debt, which Asda says provides a robust capital structure for the next decade and “the flexibility to continue to invest in the business and reduce debt.”

The first step to recovery must surely be to reverse the sales decline, and Asda could perhaps do worse to do that than reverse its strategy and look at how Walmart does it.