The retailer scaled back its full year earnings forecast after its interim net profit slumped 23 per cent to $62.2 million.
Mr Umbers said it showed it was time for an overhaul to win back customers. "The result we have presented today is unsatisfactory," he said. "Overall, the (old) strategy has not delivered a business model able to respond to the new retail landscape. We have lost relevance with some customers."
Citigroup analysts expect Myer to close at least seven department stores, while others say the retailer will have to raise capital to fund a major restructure. Mr Umbers, who ascended to the top job on March 2 after Bernie Brookes resigned, did not rule out either option but declined to give more details on the company's strategic review.
"Until we can really benchmark the various initiatives we are planning, then we can understand the capital requirements and whether we can fund them internally," he said.
"The sort of transformation we are contemplating takes place over a long period of time.
"If you look overseas, it takes three to five to seven years typically."
He said sales growth in February was below expectations and the same was expected for March.
Myer's costs have outpaced sales growth, with consumers spending less and competition intensifying thanks to online shopping and a flood of global retailers moving to Australia. The company is now forecasting full year earnings of between $75 million and $80 million, well below analysts' expectations of a $90 million profit and last year's $98.5 million result.
It's also about half the $168.7 million profit Myer made when it relisted on the share market nearly six years ago. Mr Umbers rejected suggestions by analysts that a profit warning should have been issued two weeks ago when he took on Myer's top job.
He said the retailer hadn't acted at the time because it didn't know that its February sales were weaker than expected.
Myer's shares dived 15.5 cents, or 10.1 per cent, to $1.375, well below its 2009 issue price of $4.10.
OptionsXpress market analyst Ben Le Brun says investors have little confidence the new management can turn Myer's fortunes around given previous unsuccessful attempts.
"Their share price has been savaged. People are really backing them to fail. The new management has a lot of work in front of them," he said.
"They have downgraded guidance and the market is guessing that there's further skeletons in the closet to come from the strategic review."
MYER MISSES THE MARK
* Net profit of $62.2m, down 23 pct, from $80.8m
* Total sales of $1.76b, up 1.5 pct, from $1.74b
* Fully franked interim dividend of seven cents, down from nine cents