From their website:
"The Handknitting Association of Iceland was founded in 1977 by hundreds of Icelanders mostly women who had supported their homes income by knitting pullovers, sweaters, and other things from the very special wool from Icelandic sheep. By founding the association the knitters took the sale of their goods in own hands." There are two stores in Reykjavík where knitters "deliver their products and get wool to be able to continue knitting. Sale to wholesalers is also a big deal of the business.
The main focus in the stores is selling goods that are made by members from Icelandic wool mainly lopi but also a good select of goods that are machine made in Iceland from Icelandic wool (i..e. Varma products). The association's slogan has always been 'buy directly from the people who make it'. Every three or four customers are tourists who prefer goods made in Iceland. They can be sure that handmade woolen goods that are for sale in the Handknitting Association of Iceland is knitted in Iceland, from wool from Icelandic sheep, more Icelandic it can hardly be."
Both of these stores were in the main part of the city. Skip took this shot of me (in the yellow jacket) taking a photo of the storefront.
In other stores there were many machine-knit Norwegian-style sweaters of 100% cotton. I wondered if only Icelandic woolens were allowed.
What got me interested in going to Iceland was finding out about Laura Nelkin's knitting tour that was scheduled for this September. I hemmed and hawed about going and decided not to as Skip very much wanted to go there as well. We were very fortunate that the Iceland Pro Cruises trip came along.
Here's a blog post of Laura's about the sheep industry from her first trip to Iceland in 2012. And here's the info on the upcoming one in March 2017. Now that I've had another look at the itinerary, I realize Skip and I visited most of the places on her tour so probably won't return for a knitting trip. However, if you've always wanted to do a knitting tour of Iceland, this one of Laura's looks really good and I would encourage you to 'go for it'. Hélène Magnússon also has several knitting tours that look very interesting as well.