PARIS, July 23 (Reuters) - LVMH plans to speed up its

supply chain strategy and strengthen audits and controls, chief

financial officer Jean-Jacques Guiony said on Tuesday, in the

wake of investigations into an Italian subsidiary of the French

luxury giant.

Italian prosecutors launched an investigation into suppliers

for LVMH's second-largest fashion label, Dior, revealed by

Reuters on June 11, after disclosures of alleged sweatshop-like

conditions at subcontractors for the label.

"We are going to speed up a strategy that we had been

implementing for quite some time now," said Guiony, in response

to an analyst question after reporting first-half earnings that

slightly missed analyst expectations.

He added that while the company was unaware of alleged

worker exploitation, the group accepted full responsibility for

what happened.

LVMH plans to increase "vertical integration" of Dior's

supply chain, which Guiony said was at a lower level than that

of its Louis Vuitton label, which is around 60%. Vertical

integration refers to a strategy where a company controls

multiple stages of its production process and supply chain.

He added that controls of its supply chain required further

investment.

(Reporting by Mimosa Spencer; Editing by Emelia

Sithole-Matarise)