Iceland's climate and terrain is so otherworldly—glaciers, geysers, and lava deserts dot this island in the Arctic Circle—that NASA astronauts come here to train. In contrast, the capital, Reykjavik, is a small, thriving city that plays host to great music, fashion, and art scenes. The city's compact layout encourages a sense of community and so do its many stores and cafés where young creatives converge for coffee and conversation (and to road-test their daring haircuts).

Here's a round-up of our favorites.

Sputnik
28B Laugavegur
+354 561 7060

Vintage fashion is a way of life in Reykjavik so to fit in, or rather stand out, look no further than Sputnik. You can trust the opinions of the incredibly well-dressed shop girls—when they tell you something looks good, buy it. Clothing is well-edited and grouped by category—pants, jackets, lingerie, even a section devoted to awesomely tacky bedazzled T-shirts.

Smekkleysa Plötubù (Bad Taste Records)
59 Laugavegur
+354 534 3730

A bastion of independent music, this record shop is quite literally underground: It's located beneath Reykjavik's largest supermarket. It's also home to Bad Taste Ltd., a record label founded by members of The Sugarcubes who have signed Iceland's biggest exports—Björk, Gusgus, and Sigur Rós, and its up-and-coming ones Hairdoctor, Mammút, and Múm.

Naked Ape
14 Bankastraeti
+354 534 3535

Naked Ape is run by a collective of young hipsters, who blast crazy doodle graphics onto hoodies, tees, and leggings in the backroom. Their retro '80s graphics in Lite-Brite colors look like something out of Sri Lankan superstar M.I.A.'s Galang video.

KronKron
63B Laugavegur
+354 562 8388

Kron
48 Laugavegur
+354 551 8388

With its Gobstopper-colored walls and waterfall of lights, Kron is as festive as the Spanish labels it carries: Camper, Salvador Sapena, and Again & Again. The carnival spirit continues at Kron's sister store KronKron, a veritable fashion circus starring all the best misfits and clowns: Peter Jensen, Henrick Vibskov, Marjan Pejoski, Vivienne Westwood, and Camilla Staerk.

Solon
7A Bankastraeti
+354 562 3232

Coffee, dinner, and dancing are all served at different hours in this café/bar/nightclub that also considers itself a gallery, thanks to the frequently changing artwork. Log onto the website to see photos documenting last night's excess, à la www.lastnightsparty.com.

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