UPDATE 1-Iconix to buy 51 pct stake in Ecko brands

* To buy controlling interest in Ecko brands for $63.5 mln

* Sees net royalty revenue $42-$44 mln in 2010

* Mark Ecko to continue as chief creative officer

Oct 27 (Reuters) - Rocawear maker Iconix Brand Group Inc (ICON.O) said it agreed to buy a 51 percent interest in the privately-held Ecko portfolio of brands for $63.5 million as part of its long-term growth strategy.

On a pro-forma basis, Iconix expects the joint venture to generate about $42 million to $44 million in annual net royalty revenue in 2010, of which Iconix's share will be about $26 million.

"Ecko already has strong licensing partners and a robust European platform, from which we could leverage the rest of our portfolio," Chief Executive Neil Cole said in a statement.

Iconix said it will form a joint venture company with an affiliate of the sellers of Ecko, whose brands include Ecko Unlimited, Marc Ecko, Rhino logo and Zoo York.

Marc Ecko will continue in his capacity as the chief creative officer, New York-based Iconix said.

The fashion house, several of whose brands are sold at WalMart Stores Inc (WMT.N), Target Corp (TGT.N) and Kohl's Corp (KSS.N), said some of Ecko's lifestyle brands would lend themselves easily to Iconix's direct retail model.

Iconix said it will obtain $90 million of financing at an annual interest rate of about 7.5 percent, making the effective purchase price $109 million.

Shares of the company closed at $13.37 Monday on Nasdaq.

For the alerts, double-click [ID:nWNAB4728] (Reporting by Shradhha Sharma in Bangalore; Editing by Kavita Chandran Budhraja)