Toys R Us Expands Footprint Into Naval Exchanges
The retailer adds four shop-in-shop locations, providing a low-overhead model for global reach.
Updated on Oct. 28, 2026 in Retail
Live Poll
Should military exchanges partner with major retail brands to expand shopping options at base stores?
The Navy Exchange Service Command (NEXCOM) expanded its partnership with Toys R Us by adding branded sections to four additional naval bases. These shop-in-shop locations allow the retailer to reach military families internationally without the overhead of standalone stores.
Why it matters
This model provides a low-overhead recovery strategy for a brand that shuttered its brick-and-mortar footprint, demonstrating how legacy retailers can regain presence through existing high-traffic host locations. By leveraging the captive audience of military bases, the company effectively mitigates the real estate costs that contributed to its 2017 bankruptcy.
Toys R Us now operates in 13 Navy exchanges, marking an expansion from the eight locations established since the partnership launched in 2024. This follows the retailer's 2018 closure of 800 U.S. stores after its Chapter 11 bankruptcy filing in 2017.
The players
Navy Exchange Service Command
The agency managing retail services for the U.S. Navy that oversees base exchanges globally.
Toys R Us
A global toy retailer that currently operates through partnership models following its 2017 bankruptcy.
The details
The rollout utilizes a shop-in-shop strategy where Toys R Us manages the branded product displays, while the base exchanges handle all front-end operations. Customers purchase items at existing exchange registers, eliminating the need for dedicated, site-specific retail staff. The Japan-based locations were specifically prioritized to meet higher localized toy demand within those base communities.
Timeline
2017: Toys R Us filed for Chapter 11 bankruptcy protection.
2018: The retailer closed approximately 800 U.S. stores.
2024: The partnership between NEXCOM and Toys R Us began.
October 17, 2026: New Toys R Us sections opened at four bases.
2027: Planned opening of shops in Italy and Cuba.
Market Landscape
The current expansion marks a departure from the 2018 closure of 800 U.S. Toys R Us stores by utilizing host retail infrastructure to restore consumer access. This shift follows the brand's 2017 bankruptcy, highlighting a reliance on high-traffic host locations to manage overhead.
Operators looking to rebuild brand presence should evaluate whether host-partner models can reduce the real estate exposure that typically pressures margins. Success in this format requires selecting locations with strong, predictable foot traffic that aligns with existing customer demand.
The takeaway
Retailers can effectively bypass traditional real estate risks by integrating into established, high-traffic captive retail environments. Analyze local foot-traffic data to identify potential host partners that can provide scale without the necessity of new leases.
What happens next
NEXCOM plans to open additional Toys R Us sections at naval exchanges in Naples, Italy, and Guantanamo Bay, Cuba, in 2027.
Further reading
Explore more industry trends and operational shifts at the Retail section.
Source note: This article includes information reported by Stars and Stripes.
Live Poll
Should military exchanges partner with major retail brands to expand shopping options at base stores?
