Álafoss is the small waterfall on the river Varmá that gave the country's oldest wool mill its name. The mill itself, founded in 1896, still operates as a factory outlet selling Icelandic wool — yarn in every colour, finished lopapeysa sweaters, blankets and socks — at prices noticeably lower than in Reykjavik's tourist shops. The setting is unassuming: a cluster of low industrial buildings beside the river, with the falls tumbling past.
The bigger story here is musical. The post-rock band Sigur Rós converted the old factory swimming pool next door into Sundlaugin, their main recording studio, in the early 2000s. Most of their later albums were recorded in this building. You cannot tour the studio, but standing outside the unmarked white shed is a small pilgrimage for fans, and the area as a whole has become a quietly creative quarter of weavers, painters and ceramicists.