Does anyone know the shop that sells traditional espadrilles? near Plaza d'Espana I think. It had a writeup in the New York times a couple of years ago.

There are lots of stores all over Madrid that sell alpargatas (espadrilles). Just south of the Plaza Mayor on c/Toledo there are three or four alpargaterías (stores selling mainly alpargatas) with a block or two of each other.

Don't say "espadrilles" in Madrid because it isn't an spanish word (it is catalan, I think) and nobody will understand you. Alpargata is better.

About the word: espadrilles is French (=espardenyes in Catalan, =alpargatas in Spanish).

And probably the best known alpargateria is located in the SW corner of Toledo and Segovia streets.

Is this the store and the article that you remember?

Casa Hernanz on Calle Toledo near Plaza Mayor.
NY Times