WINNIPEG -- Arson is behind an early-morning fire that destroyed two St. James businesses and damaged five others, causing up to $3 million in damage yesterday, store owners and Winnipeg police say.

Police are appealing for tips to identify and locate a potential suspect seen running from the scene seconds before the fire became a raging inferno.

All the businesses are in a strip on the north side of Portage Avenue between Collegiate and Roseberry streets.

The blaze was set when someone broke into or firebombed Double Dragon Kickboxing about 1:45 a.m., store owners said.

It spread to AAA Consignment Services, an antique shop next door.

Both businesses, at 1851 Portage Ave., were torn down after the fire was extinguished.

An overnight clerk at a Husky gas bar across the street saw a person run from the scene, his co-workers said.

Someone called police about a break-in. When officers arrived the building was on fire, said spokesman Const. Jason Michalyshen.

Owners of neighbouring businesses which were saved were anxiously waiting for police or firefighters to escort them into their stores to find out how bad the smoke and water damage was.

Constance Menzies, owner of Chocolatier Constance Popp, was worried about family heirlooms and antiques, and paintings which decorate her shop.

'I was very scared'

"There's so many special things in there," Menzies said. "When I saw that the fire was moving towards my building ... I was very scared."

Menzies and Kim Wong, who owns Good Earth restaurant, said they were told someone smashed the kickboxing school's window and tossed an incendiary device inside.

Because the burning building was not safe to enter, firefighters battled from a defensive position outside the building to prevent the fire from spreading.

The roof above AAA Consignment and Double Dragon collapsed.

More than eight hours later, a demolition crew pulled down the burned-out shell of the antique store and kickboxing school while firefighters doused hot spots.

Double Dragon hopes to resume classes at a temporary location next week, according to a voice-mail message. No one from the school returned a reporter's call.

Gary Driscoll, owner of AAA Consignment Services, could not be reached for comment.

"I'm devastated for (Gary). All he kept saying is, 'At least no one's hurt,'" Menzies said.

Anyone with information about the fire or the person's identity is asked to call the arson strike force at 986-6813 or Crime Stoppers at 786-8477.

chris.kitching@sunmedia.ca