The settlement, which was first reported last month, is the highest ever agreed by a company with the Italian tax authorities. Kering, which has denied avoiding tax, has a cash pile estimated by analysts at more than £8.5 billion, meaning it was equipped to absorb the cost.

However, the case carries with it a reputational impact for a group that has long highlighted its social responsibility credentials and its environmentally friendly initiatives. Kering’s billionaire boss, Francois-Henri Pinault, pledged £86 million for the rebuilding of the Notre-Cathedral in Paris after it was devastated by fire last month.

“In terms of reputation, this is a slightly more important concern as Kering has stood up as a champion of ESG (environmental, social and governance),” Bernstein analyst Luca Solca said, adding that it might have a ripple effect on ESG-minded investors, though probably less so with consumers.