Firefighters from three stations responded to a massive "toxic" fire at an army surplus store in downtown Chatham Saturday that caused an estimated $550,000 in damage.

Emergency officials knocked on more than 30 doors near Church's Army and Outdoor on Thames Street after the building burst into flames around 1:30 p.m. and warned residents to evacuate or close their windows to keep out fumes from the fire police described as "toxic."

Thick, black smoke billowed out of the ruined building, causing a dark cloud that hung in the neighbourhood for hours and could be seen from all over town.

Toxic fire in Chatham

Fire crews battled a 'toxic' fire near Thames and Dover Streets in downtown Chatham on Oct. 14, 2017. Residents were being asked to stay indoors and shut their windows. (Twitter Photo/@chathamveranda)

"Luckily fires of this magnitude rarely happen in our community, however it is something that our firefighters train for and are highly skilled in dealing with this type of incident," said assistant chief Chris Case.

Almost 60 firefighters battled the inferno, using a ladder truck to douse the flames from above after the roof collapsed.

Lonney Butler was outside building a deck when he saw smoke rising into the sky. He saw the building "ripple" and "buckle" as the roof blew and went indoors because the smoke was "sort of green."

Large crowds formed around the fire as it raged in the store and a hot tub shop out back, according to councillor Michael Bondy.

"The entire city is paralyzed because everyone drove to the middle of Chatham to see what was burning," he said Saturday. "The entire town came to see this thing. It's like the Santa Claus parade."

Two employees and three customers were inside when the blaze began, but managed to escape unharmed.

"The individuals who were in the store when the fire began – did the right thing – the got out, stayed out and called 911," added Case.

All residents have been able to return to their homes. The Office of the Ontario Fire Marshal is continuing to investigate what sparked the fire.