Sela

In post-Soviet Russia, “foreign” meant quality and “Russian” meant cheap. Western brands commanded trust; domestic products prompted suspicion. Into this psychological landscape stepped Boris Ostrobrod, a Soviet engineer turned Israeli immigrant, with a solution as elegant as it was effective: build a Russian fashion company that nobody knew was Russian.

The Hebrew brand name “Sela” (rock), the Israeli corporate headquarters in Bat-Yam, the design operations transplanted from Russia to Tel Aviv—none of this was deception. But it was strategic identity architecture. InfoLine CEO Ivan Fedyakov captured the result years later: “For a long time it was possible to hide that this company is domestic. Many consumers thought that this company was European, since both store design and clothing design, and in general, the approach to work was fully focused on the best standards of international practices.”

From four containers of Chinese down jackets in 1992 to 600 stores across 14 countries by 2011, Sela (Сэла) proved that outsider identity could become insider advantage.

When “Russian” Meant Cheap

The early 1990s presented a peculiar consumer psychology problem. After seventy years of Soviet production, Russian consumers had learned to distrust domestic goods. The queues, the shortages, the persistent mediocrity of state-manufactured products had created a simple mental shortcut: foreign good, domestic bad.

Western brands that entered the Russian market enjoyed automatic credibility. A German appliance, an Italian suit, an American cola—these commanded premiums not always justified by quality, simply because their origin signaled reliability. Russian entrepreneurs building domestic brands faced an uphill battle against their own consumers’ prejudices.

Boris Ostrobrod saw this clearly from his vantage point in Bat-Yam, Israel, where he had settled in 1990 after emigrating from Leningrad (Ленинградская область). The beach there was called “Sela”—Hebrew for “rock.” When he and cousin Arkady Pekarevsky founded their import company in 1991, the name captured both their new home and their business philosophy: solid as stone.

But “Sela” also solved a practical problem. The word sounded European to Russian ears. The company was registered in Israel (Израиль). When stores opened, they bore none of the stigma attached to domestic brands. Consumers could choose Sela over bazaar traders without admitting they were buying Russian.

The Hebrew Rock

The identity architecture began with the corporate structure. Sela Corporation was founded and headquartered in Israel—legally, practically, and strategically an Israeli company that happened to serve the Russian market. Design operations were based in Tel Aviv. Production was outsourced to China through relationships Boris cultivated personally over decades. Only the retail storefronts touched Russian soil.

This wasn’t subterfuge; it was vertical integration optimized for perception as much as efficiency. The Israeli design operation gave Sela flexibility Western brands lacked. Global fashion companies adapted European collections for Russia; Sela designed from inception for Russian consumers—but designed in a location that conveyed European sensibility. The distinction mattered for everything from sizing to color palettes to seasonal timing.

When Boris attended a clothing exhibition in 1992 and ordered four containers of Chinese down jackets, the goods arrived late—mid-January—but severe cold ensured immediate sales. Then came the unexpected: ten more containers arrived unannounced. A week later, the pattern repeated. Boris later recalled being uncertain they could sell such quantities, but the clothing “flew off.” This accidental oversupply launched what he called “the huge Sela mechanism.”

The model that emerged combined the best of multiple worlds: Israeli creative direction (European credibility), Chinese manufacturing (competitive costs), Russian retail execution (market knowledge). Boris maintained that his Chinese suppliers “know me personally and are ashamed to do bad work for me personally”—relationship capital built over decades that competitors couldn’t replicate with purchase orders.

Building European Standards

The “foreign” positioning required substance behind the perception. Sela couldn’t simply claim European standards; it had to deliver them. Store design followed international retail practices. Visual merchandising matched what consumers saw in Western chains. Staff training emphasized service levels Russian retailers often neglected.

The first branded store opened in St. Petersburg in 1997—pioneering the concept of branded fashion retail in Russia before Western competitors established significant presence. Sela wasn’t competing against H&M or Zara; those brands hadn’t arrived yet. It was competing against bazaar traders, kiosks, and the lingering memory of Soviet clothing production.

Positioning mattered because consumers drew conclusions from every detail. Store interiors signaled origin. Staff behavior signaled culture. Product presentation signaled sophistication. Sela invested in each element to reinforce the European perception. The company hired designers who understood international retail aesthetics. Training programs emphasized customer service standards common in Western chains but rare in Russian stores where Soviet-era indifference lingered.

By positioning itself as “foreign,” Sela captured consumers ready to pay premiums for quality but not yet served by actual Western brands. The Hebrew name, the Israeli headquarters, the international design sensibility—these created permission for Russian consumers to trust a Russian company.

Fedyakov’s assessment captures how completely the positioning worked: “a phenomenon on the Russian market”—the first Russian company with full-cycle operations from production to retail that consumers genuinely believed was European. The identity strategy didn’t just help Sela compete; it created a category Western competitors would later struggle to dominate because Russian consumers had already formed loyalty to what they thought was a European brand.

The Franchise That Changed Retail

The identity architecture extended to Sela’s expansion model. Opening 600 owned stores would have required capital Boris couldn’t access. But Sela became the first Russian fashion company to develop comprehensive franchise documentation and standardized processes—essentially creating a repeatable business-in-a-box.

The franchise model worked precisely because of the “foreign” positioning. Local entrepreneurs weren’t investing in a Russian brand; they were bringing a European retail concept to their cities. The Hebrew name, the Israeli design credentials, the standardized operations—these gave franchisees the same permission structure that gave consumers trust.

The documentation was comprehensive. Operations manuals covered everything from store layout to inventory management to customer service protocols. Franchisees received training at existing locations before opening their own. Quality control ensured consistency across the growing network. Boris understood that the “European” perception depended on uniform execution—one poorly run franchise could undermine the entire brand narrative.

The model attracted entrepreneurs across Russia’s vast geography. Regional businesspeople who wanted retail exposure but lacked fashion expertise could buy into a proven system. Sela provided the brand, the supply chain, and the operational know-how. Franchisees provided local capital and market knowledge. The partnership scaled faster than Boris could have achieved alone.

By 2006, the network exceeded 500 stores across 15 countries, including expansion into Lithuania and Poland—Eastern European markets where the “Israeli-designed, Chinese-manufactured” positioning carried similar advantages over local competition. The model proved so effective that competitors copied it industry-wide. What started as one immigrant’s identity solution became the template for Russian fashion retail.

The 2003 Brand of the Year/Effie award validated the approach. Here was a Russian company, founded by Russian emigrants, serving Russian consumers—winning recognition that would have been impossible had consumers understood its domestic origins in those early years. By 2011, the empire peaked at approximately 600 stores across 14 countries, generating annual revenue of roughly $200 million.

The Identity That Outlasted the Disguise

By the 2010s, something had shifted in Russian consumer psychology. Domestic brands had established credibility. The automatic distrust of “Made in Russia” had softened. Young consumers who didn’t remember Soviet shortages didn’t carry the same prejudices.

Sela’s Hebrew name and Israeli headquarters no longer needed to disguise Russian ownership—they had become genuine brand assets. The company’s reputation for quality now stood on its own record, independent of perceived origin. Customers who had been deceived (if that’s the right word) into trusting Sela had learned that their trust was warranted.

The transition came gradually. By the mid-2010s, consumers who had grown up with Sela didn’t question its origins—they knew it as a reliable fashion retailer, regardless of where its headquarters sat. The Hebrew name had lost its functional purpose as camouflage but retained its brand recognition. In a market where consumer sophistication had evolved, the identity strategy’s success was measured not by continued deception but by the trust it had enabled.

Economic pressures, however, tested the model. The 2014-2016 crisis—driven by ruble devaluation, Western sanctions, and oil price collapse—forced major restructuring. Boris consolidated competing Moscow and St. Petersburg offices, closed underperforming stores, and reduced staff. Consumer real incomes fell for 38 consecutive months, the longest contraction in post-Soviet history. Sela’s son Eduard, by then a senior executive, noted they raised prices only 20-25% despite the dollar’s rise—protecting customers but accepting margin compression.

By 2018, the network had contracted to approximately 400 stores. More critically, Sela needed investment Boris couldn’t secure—analysts estimated 1.3 billion rubles required while valuing the company at only 500-600 million. The math didn’t work. After three crises in two decades, Boris faced a different question: not how to survive the storm, but whether to keep sailing at all.

This evolution made the 2019 sale to Melon Fashion Group possible. Boris sold not a “foreign” brand that had tricked Russians, but a Russian success story that had earned its place in the market. The 278 stores transferred in what analysts called “the largest deal in Russian fashion retail history” represented something more valuable than real estate: brand equity built on delivery, not deception.

Boris died on February 9, 2023, at age 65, when his car slid into a lake in Latvia and overturned. He was buried in Israel where Sela’s design operations had been headquartered for 32 years. The immigrant entrepreneur who had leveraged outsider identity to build insider advantage left behind a company that had outgrown its origin strategy—proof that credibility earned through performance eventually supersedes credibility borrowed from perception.

The Outsider Advantage

Sela’s legacy extends beyond 600 stores or $200 million in revenue. Boris Ostrobrod proved that immigrant entrepreneurs possess distinctive advantages in emerging markets: the psychological distance to see opportunities insiders miss, the cultural positioning to solve perception problems locals cannot address, and the cross-border networks to build operational advantages that domestic competitors lack.

The Hebrew name wasn’t a lie—Sela was genuinely an Israeli company. But it was a strategic truth deployed for competitive advantage. In an era when “foreign” meant quality, Boris created something foreign enough to earn trust while Russian enough to understand the market.

For emerging market founders facing consumer prejudice against domestic products today, Sela’s playbook offers a framework. The question isn’t whether to hide your origin; it’s whether you can architect an identity that solves your market’s perception problem while building genuine quality that justifies the positioning.

The Hebrew word “sela” means rock—appropriate for a company that built its foundation on the solid ground of international standards while navigating the shifting sands of consumer psychology. That dual capability, identity architecture plus operational excellence, created something that outlasted both its founder and the market conditions that made it necessary.

Last updated: January 15, 2026