Álafoss

There are two places in Reykjavík where prefer to buy lopi and one of them is Álafoss in Mosfellsbær (not actually in Reykjavík but close enough).

Álafoss in Mosfellsbær

It's located in a beautiful place with trees all around and a little stream flowing. Going there makes me feel like I'm out in the countryside buying straight from the farmer ... or something.

The store does not only sell lopi and knitting supplies but also a good variety of hand knit items along with different hand made and/or Icelandic product. It's actually a popular stop for tourists especially during the summer.

The store

For buying lopi this is one of the best places in my oppinion. Not only do they sell the whole collection of plötulopi, létt-lopi, Álafoss lopi, Bulky lopi, einband and Kambgarn, they also sell Reynold's lopi from time to time. The difference between Ístex and Reynold's is the colors. I've been told that Ístex produces both brands but in different colors for different markets. Lopi is also usually cheaper at Álafoss than most stores and you can buy in bulk.
Other types of yarn are also sold in the store, mostly from Hjertegarn. I've tried both the superwash DK and superwash fingering (baby). Both were reasonably priced and great to knit with. Then there's also a fine selection of buttons, needles and other knitting related stuff.

Einband

Loads of lopi

Hjertegarn and Bulky lopi

Buttons

One of the best things about shopping at Álafoss is the service. I always find the staff very informative and friendly. It's also great to be able to browse through all the Lopi knitting books and pamphlets or just browse the store and get ideas from the many, many handknit items. Sometimes it's just easier to decide which color to buy when you can see a sweater or mittens made with the ones you're trying to choose from.  

I definitely recommend this place to anyone who likes to knit with lopi (or just knit) and enjoys traditional handknit items.

(Just to make clear: I am not affiliated with any of the yarn stores I write about.)