Our Airbnb was nearby, so I walked over in the morning just to check out the window display, see if I wanted to return later during their opening hours, which were already packed full with other activities in our itinerary. The super nice lady working there saw me peering in, and let me in over an hour early to browse and buy! I never would have made it back later so I'm grateful she did. Very cute shop, fun faux fur pom-poms! Lots of yarn available in U.S.; Debbie Bliss, Brooklyn Tweed, Malabrigo, Rowan, West Yorkshire Spinners, HEDGEHOG FIBRES (!), etc, though some Icelandic yarns too. To be perfectly honest, if I were only visiting Reykjavik city center I probably wouldn't take the time to go so far out of the way since much of their stock is pretty widely available, though I bet this is a keystone shop for locals. We walked by late one evening and a knitting circle was there, making the place nice and cozy. A very enjoyable shop :)
I wandered in on a trip to Reykjavik and was delighted by this shop. Amazing selection of colors. The largest selection of Icelandic yarn in the city. Best of all, exceptional customer service. A cup of coffee, perusing the yarns and patterns, advising me and even helping me begin my next project. Highly recommend!
Mostly stocks widely available American yarns, but has a very nice book selection. A fairly long and uninteresting walk if you're visiting Reykjavik - I wouldn't go out of my way again. Was hoping for local - or at least regional - yarns, but it was mostly Rowan, Brooklyn Tweed, and the like. Didn't find it to be particularly friendly.
Great selection of yarn - including hand-dyed Icelandic wool.
I came to the store asking for advice when my knitting got twisted. The Finnish lady in the store took 2 hours of her time to teach me how to undo my knitting and redo it. She was extremely helpful. I didn't buy anything but they have a large variety of yarns and I saw many other people browsing in the shop and getting close assistance from the employees.